Wealth management in Spain: how to choose a private bank and mandate

Madrid and Barcelona, hubs of Spanish private banking

Wealth management in Spain means private banking services offered mainly in Madrid and Barcelona, covering securities custody, advice and discretionary mandates, under the supervision of the CNMV and the Bank of Spain. All major Spanish banks run a banca privada division, and several specialist or foreign firms operate alongside them. Non-resident clients are often Latin American or European families who already own property.

All major Spanish banks run a banca privada division, and several specialist or foreign firms operate in Madrid and Barcelona. Non-resident clients are often Latin American or European families who already own property in Spain.

Advice, discretionary mandate or execution only

Under MiFID II, a Spanish bank distinguishes order execution, investment advice, independent or not, and discretionary portfolio management. Each option involves a suitability test and different pricing, set out in the contract.

The CNMV and its register of authorised firms

The Comisión Nacional del Mercado de Valores supervises investment services and keeps a public register of authorised banks, broker-dealers and managers. Checking that a contact appears on that register is a basic precaution before moving any assets.

FOGAIN and protection of securities held in custody

Securities on deposit remain the client's property and are segregated from the bank's balance sheet. The deposit guarantee fund also covers certain securities up to 100,000 euros if the bank fails; for broker-dealers, FOGAIN plays a similar role.

Entry thresholds in Spanish banca privada

There is no legal threshold; each Spanish private bank sets its own. Spanish private banking divisions generally target financial assets of several hundred thousand euros, and bespoke discretionary management often requires far larger amounts.

A universal bank versus specialist houses

A universal bank offers integration with lending and current accounts, while a specialist house stresses its open architecture. CaixaBank has a private banking arm built into the group, whose management and custody fees should be compared in writing.

Wealth tax and the solidarity tax

Spain keeps a wealth tax, managed by the autonomous communities with varying allowances, plus a temporary solidarity tax on large fortunes introduced in 2022. Non-residents are liable on their assets located in Spain.

Modelo 720 for wealthy new residents

A Spanish tax resident reports foreign accounts, securities and real estate on Modelo 720 when any category exceeds 50,000 euros. The penalty regime was revised after the 2022 EU Court of Justice ruling, but the reporting duty remains.

Source of wealth: the centrepiece of the file

Sale of a business, inheritance, accumulated professional income: a Spanish private bank asks for deeds, statements and tax returns tracing how the wealth was built. For clients from Latin America, checks on the countries the funds come from are often extensive.

Tax reporting and information exchange for foreign clients

For private banking in Spain, the bank issues a yearly tax statement and sends CRS data to the client's country of residence. A French resident declares accounts held in Spain on form 3916 and portfolio income on the annual return.

Documents and steps to open a Spain wealth management account

To open a Spain wealth management account, the client starts with a meeting with a private banker, who presents the offer, the services and the access conditions. The client then supplies a passport or identity card, the NIE, proof of address and tax information. Each bank sets its own list of documents, which is best obtained in writing before the meeting.

Reconstructing the source of wealth is the longest stage. The bank asks for deeds of sale, statements from other institutions, tax returns, inheritance deeds or property contracts that trace how the assets were built. The clearer the chronology and the better it is proven by official documents, the faster the analysis moves, while grey areas lead to further requests. These documents are also used in the bank's later reviews.

Before assets are transferred, the bank carries out the suitability test required by MiFID II, then has the client sign the management or advisory contract, the client category, the risk profile and the fee terms. Read each document carefully and ask what the bank can do alone, what requires your consent and which fees apply to each service. Do not sign anything you have not understood.

How to choose a private bank in Spain

Start by checking the nature of the institution: a universal bank with a banca privada division, a specialist house or the subsidiary of a foreign group. Verify its entry on the CNMV register, the reference regulator, and ask for the name of the entity that will sign your contract. This basic check protects against unauthorised intermediaries and clarifies the remedies available.

Then compare the formulas: simple execution, investment advice or discretionary mandate. Each has its own service level, suitability test and pricing. Ask how the bank selects its products, whether it favours its in-house funds and how it handles conflicts of interest. A transparent bank explains these points plainly and puts them in writing. Ask for the exact price list of each formula before choosing between them.

Finally, think about asset custody and the day-to-day relationship. Question the bank on segregation of securities, the custodian used and the reporting offered. Check the service language, the availability of the banker and how easily linked current accounts are managed. If you are a non-resident, ask which constraints apply to your profile and country of residence. Do not hesitate to ask for a written summary of these points.

Common mistakes in private banking in Spain

The first mistake is to choose on the bank's name alone. A big brand guarantees neither a suitable offer nor moderate fees. Compare at least two or three written proposals, with management, custody, transaction and currency charges. Also ask about any retrocessions received on funds and structured products. Request the proposals in the same format so that the comparison is fair, and insist on seeing the total annual cost as a single figure.

The second mistake is to underestimate Spanish taxation. Wealth tax, run by the autonomous communities, the solidarity tax and Modelo 720 apply depending on residence and the nature of the assets. A new resident who neglects these duties faces difficulties. Have your situation validated by a tax adviser before setting up the portfolio. Rules change regularly, so a yearly check is wise.

The third mistake is to confuse protection with absence of risk. Deposited securities are segregated from the bank's balance sheet and certain protection schemes exist, but they cover neither market losses nor investment choices. Read the risk profile you sign, and refuse any product you do not understand. A useful question to ask is what the worst possible loss could be, and how likely the bank thinks it is.

Following wealth management in Spain: reporting and declarations

Once the portfolio is in place, insist on regular statements showing the value of assets, movements, fees charged and performance. Plan a periodic meeting with the banker to review objectives and the risk profile. A change of circumstances, such as an inheritance, the sale of a business or a move, justifies an immediate update of the file. Note the decisions taken at each meeting.

Tell the bank about any change in tax residence. A French tax resident declares Spanish accounts on form 3916, while a Spanish tax resident follows local rules, including Modelo 720. The bank passes information to the authorities through the CRS. Keep a calendar of deadlines and the annual tax statements issued by the bank. An omission can lead to penalties, so do not leave this for the end of the year.

Finally, prepare for continuity. Name the people authorised to act, check the bank's procedure in case of death or incapacity and keep the contracts, mandates and statements in a place your family can reach. A clear file eases reviews, protects relatives and avoids lengthy procedures when circumstances become difficult. This organisation also reassures the banker, who can then react faster, and it saves your relatives from guessing what you wanted.