THE rich get all the breaks. They even have their own private bankers to tell them how to invest and earn big returns.

TNP ILLUSTRATION: LARRY HAVERKAMP

That is the popular perception, but don't be so sure. Another view is private bankers charge a lot and offer little.

Some private banks require 'only' $200,000 to open an account. I call it a lot of money but the banking elite call those banks 'cheap'.

One thing that is really cheap is their free coffee.

Go to any private banking floor and you will get all the coffee you can drink at no charge. The toilet is usually on the same floor so you can stay there all day and drink.

Foreign banks like UBS, RBS, Citibank and Julius Baer require higher minimums - like $1million - to open a private banking account. They serve free coffee in fancy china cups that you worry about breaking. Try asking for kopi-o and they may kick you out.

To show that you are 'one of them', request a latte. It is coffee mixed with a lot of milk. As far as I can tell, it is the same as our kopi.

The other sophisticated choice is espresso. In Italian it means 'coffee in a small cup with enough caffeine to keep you awake for a week'.

The big question is: 'Other than the free coffee, how do private banks justify their high fees?'

ALL refuse to publish investment returns so there is no way to evaluate their performance. Most just want to give 'market advice'.

My brother-in-law told me his private banker had called him with the bank's official forecast: 'The market will remain bearish subject to unforeseen bullish developments.'

Oh yeah? How can advice like that ever be wrong?

Bank secrecy: dead or alive?

The biggest private banking story of the century hit last week. It came from Swiss bank UBS, the world's largest private bank.

It has more than $2.5 trillion under its management and 2,000 employees here in Singapore.

It has agreed to pay a humongous fine of US$780 million ($1.2b) to settle fraud charges for violating US laws.

US court documents reveal that UBS used shell accounts to conceal customer identity from the tax authorities. It also helped as many as 52,000 US customers hide about US$15 billion in UBS accounts.

The US Justice Department said: 'Swiss bankers routinely travelled to the US to market Swiss bank secrecy to US clients interested in attempting to evade US income taxes.'

They made a total of about 3,800 trips. I figure Skype could have saved them $50 million.

Will this case kill bank secrecy?

Don't plan the funeral yet. Of the 52,000 US customer accounts, UBS says that US/Swiss tax treaties require the bank to reveal only 300 client records.

Switzerland's president, Mr Hans-Rudolf Merz, told reporters: 'Banking secrecy, ladies and gentlemen, remains intact.'

On Friday, UBS told me that it thinks everyone ought to pay their taxes.

But how can a bank check tax returns and ask each customer: 'Have you been a good boy or girl? Can you prove to us that you filled out your tax forms properly and paid all that you owe?'

You see the problem.

S'pore can be top in private banking

WE HAVE advantages that could someday make us the world's top private banking centre.

First, our bank secrecy laws are more intact than Switzerland's. It is unlikely we would run into their disclosure problem.

We also have wonderfully low tax rates. Taxes on interest, dividends, capital gains and inheritance are all zero. What other country offers that?

Most importantly, we have fair laws and an efficient court system. We take it for granted but you don't find it everywhere.

Don't forget the frills. We can compete aggressively with our FREE coffee, latte and espresso. And unlike the Swiss, we also have kopi-o and kopi-c.

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