Private banking refers to the exclusive offering of specialized financial services for high net worth individuals. The umbrella term for these services is "wealth management". Private bankers have far fewer customers than retail bankers. This allows them to be extremely familiar with each ones complex financial situation. Services include investment consultations, tax planning, estate planning and other specialized assistance.
For example, a private bank may offer advice and analysis on hedge funds or other investment opportunities that are restricted to high net worth individuals. Since these investors have many investments in a variety of ventures, a large part of private banking involves tax planning and preparation. Simply figuring out the tax liability for each investment can be very difficult and time consuming.
Though private banking is not as ubiqutious retail banking, when one considers that the wealthiest 5% of Americans own about 60% of it's wealth, it becomes obvious that private banking is big business.