In-depth guide · Governance
Tendering banking relationships: the RFP process for family offices
Updated: · Leutrim Miftaraj, FLIORE · Editorial standards · Other languages: Deutsch · Français · Español
Short answer
A request for proposal (RFP) makes bank offers comparable: the family office describes its needs – custody, trading, foreign exchange, credit, reporting –, asks every bank the same questions, compares terms on the basis of a common model calculation and assesses quality and stability with a weighted matrix. Then it negotiates, switches where it makes sense and checks every year whether service and costs still match.
Why tender
Many families keep their banking relationships for decades, often out of habit. Terms creep up unnoticed, services no longer fit today's needs, and no one knows what another bank would offer. A tender creates transparency – even if the existing bank stays in the end, then usually on better terms and with clearly agreed services.
The process
- Describe the needs: size of the wealth, asset classes, currencies, trading, credit, custody of private market investments, reporting, interfaces.
- Long list and short list: three to five banks that cover the required size, location and services.
- Send the questionnaire and a model portfolio, with a deadline and a uniform answer format.
- Evaluate answers and terms, ask follow-up questions.
- Presentations of the two or three best offers with the future relationship team.
- Negotiation, contract with a schedule of terms, onboarding and an orderly transfer.
- Annual review of costs and service against the offer.
The scoring matrix
| Criterion | Weight | What is assessed |
|---|---|---|
| Stability and creditworthiness | 20 % | Rating, capitalisation, owners, location |
| Total costs | 25 % | Model calculation including custody, brokerage, FX spreads, third-party fees |
| Custody and settlement | 15 % | Markets, private market investments, precious metals, error rate |
| Reporting and interfaces | 15 % | Data delivery (e.g. CAMT.053, MT940), tax statements, access |
| Relationship management | 15 % | Experience, availability, deputies in the team |
| Credit and foreign exchange | 10 % | Lombard terms, loan-to-value ratios, FX trading |
Comparing terms properly
Bank offers are hard to compare because they are structured differently: flat fees, custody fees in basis points, brokerage, FX margins, fees for third-party custody and surcharges for certain markets. The most reliable comparison comes from a model calculation: a typical year with the family office's own portfolio, its usual transactions and FX deals, calculated for each bank with its own terms. FX spreads and fees for fund units are underestimated particularly often.
Safety of the assets
Securities in a custody account belong to the client and are in principle segregated if the bank fails. Account balances, by contrast, are claims against the bank and are protected only up to the level of deposit protection – in Switzerland up to CHF 100,000 per client and bank through esisuisse, in the EU up to EUR 100,000. With large cash holdings it is therefore worth spreading them across several banks or investing them in money market instruments held in custody.
Worked example (simplified)
A family with around CHF 150 million at two banks tenders its banking relationships. The model calculation shows that the existing main bank is considerably more expensive mainly on FX transactions, while its custody fees are in line. Two new banks offer better terms, one of them with electronic data delivery that simplifies reporting. In the end the family keeps its main bank on renegotiated FX terms and moves a third of the wealth to the new bank – with a written schedule of terms and an annual cost review.
Contents of the questionnaire
A good questionnaire is short enough to be answered in full and concrete enough to make answers comparable. It should cover at least these areas:
- Bank and stability: owners, rating, capital ratios, place of custody.
- Relationship management: team, experience with family offices, deputies, availability.
- Custody: markets, sub-custodians, private market investments, precious metals, settlement times.
- Trading and foreign exchange: execution policy, spreads, trading hours.
- Credit: Lombard and mortgage terms, loan-to-value ratios, rules for margin calls.
- Reporting and data: formats, electronic delivery, tax statements, interfaces.
- Terms: complete fee schedule and a model calculation for the family office's own portfolio.
- Compliance: documents for family structures, handling of AEOI and FATCA.
In FLIORE
FLIORE keeps the accounts and portfolios of all banks consolidated, imports bank statements electronically and stores schedules of terms and contracts in the document vault. Costs per bank can thus be checked every year against the offer, and a switch can be carried out without losing data.
At a glance
| Core | Same questionnaire, common model calculation, weighted matrix |
|---|---|
| Often underestimated | FX spreads and fees for fund units |
| Deposit protection | CH up to CHF 100,000 (esisuisse), EU up to EUR 100,000 |
Terms on this page
- FATCA
- US law under which foreign financial institutions must report accounts of US persons to the US tax authority, the IRS.
Frequently asked questions
How often should banking relationships be tendered?
A full tender every three to five years is common, with an annual cost review against the agreed schedule of terms in between.
How many banks should be asked?
Three to five on the short list. More offers increase the effort more than the insight.
Is a flat fee better than individual fees?
That depends on the trading activity. The model calculation with the family office's own portfolio shows which model is cheaper.
Are securities safe if a bank fails?
Custody assets belong to the client and are in principle segregated. Account balances are protected only up to the level of deposit protection.
How does a change of bank work?
With onboarding and KYC at the new bank, transfer of securities and accounts, adjustment of standing orders and powers of attorney, and reconciliation of the transferred holdings.
Who should run the tender?
The family office, ideally the CFO or CIO, with clear criteria and the family involved in the decision.
Should all services sit with one bank?
Not necessarily. Many families separate custody and management or use two banks to reduce dependence and keep terms comparable. More banks, however, mean more effort for KYC and reporting.
What belongs in the schedule of terms?
All agreed prices with their validity: custody and management fees, brokerage per market, FX spreads, credit interest, fees for third-party custody and special services. It is the basis for the annual cost review.
How are FX spreads negotiated?
With concrete figures from the model calculation and last year's trading volume. Fixed margins per volume tier, or execution at reference rates with a fixed mark-up, are often negotiable.
How long does a tender take?
From sending the questionnaire to the decision usually a few weeks, depending on response deadlines and presentations. The transfer to the new bank can take additional time, especially with private market investments and structures in several countries.
What if the existing bank improves its offer?
Assess the offer like any other – with the same model calculation and the same criteria. An improvement by the existing bank often makes economic sense because a switch causes effort; what matters is that the new terms are agreed in writing.
Sources
- esisuisse – deposit protection of Swiss banks and securities firms
- Directive 2014/49/EU on deposit guarantee schemes – EUR-Lex
- FINMA – authorised institutions and supervision
- BaFin – company database and supervision
- ISO 20022 – message standard (CAMT.053)
This page provides orientation and does not replace legal or tax advice. The cited legal sources in their applicable version are authoritative.
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