A SUPPLEMENT TO
open CommuniCation:
Third-party Marketers
resource guide
Third-party Marketers
resource guide
Third-party Marketers
exploring the Bank Advisor/TpM Relationship
A2 A3
The
TRUTH
about bank brokerage.
10-FID-0099 FID-Ad-BIC.indd 1 5/14/10 3:44:51 PM
There are many facTors ThaT affecT The sTrengTh of a
bank/TPm ParTnershiP. We examine The currenT sTaTe of
ThaT relaTionshiP and suggesT PaThs To imProvemenT.
A2 A3
The
TRUTH
about bank brokerage.
10-FID-0099 FID-Ad-BIC.indd 1 5/14/10 3:44:51 PM
Open
Keeping
the Lines of
CommuniCation...
There are many facTors ThaT affecT The sTrengTh of a
bank/TPm ParTnershiP. We examine The currenT sTaTe of
ThaT relaTionshiP and suggesT PaThs To imProvemenT.
A4 A5 In June of this year, Bank Investment Consultant asked readers to share
their thoughts on their TpMs’ services on topics such as product offerings, sales support, technology and problem resolution. eighty-two bank reps took time out of their busy schedules to answer multiple-choice and open-ended questions.
What the survey found was that in each area of inquiry, the majority of responding reps said they were very satisfied or somewhat satisfied with their TpM’s performance, while between 11% and 38% said they were very dissat-isfied or somewhat dissatdissat-isfied.
Looking at specific areas of the survey, TpM product offerings fared the best, with 60% of respondents saying they were very satisfied and 29% saying they were at least somewhat satisfied. Only 7% said they were very dissatisfied with the offerings, and the remaining 4% noted they were somewhat dissatisfied.
Also relatively strong were reps’ opinions about their TpM’s compliance services (85% positive, 15% negative); problem resolution abilities (80% positive, 20% negative); processing operations (80% positive, 20% negative); training and support (80% positive, 20% negative); technology platform (76% positive, 24% negative); and sales support (75% positive, 25% negative).
The biggest area with room for improvement was recruiting, with 21% of respondents saying their TpM was very unhelpful with recruiting efforts and another 17% saying their TpM was somewhat unhelpful. Just over a quarter of the group said their TpM was very helpful, with the largest group, 37%, characterizing TpM assistance with recruiting as somewhat helpful.
It is difficult to know exactly how these responses—in addition to financial considerations such as fee splits between parties—might play out in terms of a decision by a bank to keep its current TpM or move to another provider.
When it comes to the relationship between banks and their third-party
marketers (tpms), the good news is that most program managers and
bank advisors—four out of five queried—seem to be content enough
that they are not contemplating changing partners. the bad news is that
one in five is thinking about making a change, and that many bank reps
have criticisms of some aspect of their tpm relationship.
One thing is certain, however, a move can cause numerous disruptions to bank operations, bank reps and especially bank customers. Resolving problems and improving the relationship between the bank and its TpM may in the end be a simpler and more satisfying solution.
In that regard, some of the suggestions in the survey are instructive. In the area of recruiting support, for example, a number of respondents suggested more prescreening of the candidates offered to the bank. In the technology platform arena, some respondents called for more upgrades and more user-friendly systems.
On the question of problem resolution, which is a critical piece of the TpM/ bank relationship, the most common suggestions for improvement were having designated go-to people, having more and better-trained staff and responding to problems or questions from bank reps more quickly. “Have a team of people who own the problem, rather than passing the buck all the time,” said one frus-trated respondent. Another rep said that TpMs “could do a better job of letting reps and program managers know where they go for different problems.”
In terms of training, reps said they’d like more face-to-face time, as well as additional online learning opportunities. One rep noted that “more sale-related revenue-producing ideas” would be beneficial.
Over the next several pages, we offer additional survey findings, and discuss practical tips and strategies from advisors and TpM executives to help improve the relationship and better understand the reasons that lead to banks changing providers. n
How satisfied are you with your TPM’s problem resolution abilities? Very Satisfied 45% Somewhat Satisfied 35% Somewhat Dissatisfied 8% Very Dissatisfied 12%
How satisfied are you with your TPM’s product offerings? Very Satisfied 60% Somewhat Satisfied 29% Somewhat Dissatisfied 4% Very Dissatisfied 7%
Have you considered switching TPMs recently?
NO
80%
YES
20%
How likely are you to change TPMs in the next year or two?
Very Unlikely 59% Somewhat Unlikely 18% Somewhat Likely 16% Very Likely 7%
How satisfied are you with your TPM’s training and support?
Very Satisfied 37% Somewhat Satisfied 43% Somewhat Dissatisfied 7% Very Dissatisfied 13%
How satisfied are you with your TPM’s sales support? Very Satisfied 32% Somewhat Satisfied 43% Somewhat Dissatisfied 10% Very Dissatisfied 15%
How satisfied are you with your TPM’s technology platform? Very Satisfied 38% Somewhat Satisfied 38% Somewhat Dissatisfied 13% Very Dissatisfied 14436_BIC_TPMsupplement_TP.indd 4 8/18/10 2:19:47 PM
A4 A5 In June of this year, Bank Investment Consultant asked readers to share
their thoughts on their TpMs’ services on topics such as product offerings, sales support, technology and problem resolution. eighty-two bank reps took time out of their busy schedules to answer multiple-choice and open-ended questions.
What the survey found was that in each area of inquiry, the majority of responding reps said they were very satisfied or somewhat satisfied with their TpM’s performance, while between 11% and 38% said they were very dissat-isfied or somewhat dissatdissat-isfied.
Looking at specific areas of the survey, TpM product offerings fared the best, with 60% of respondents saying they were very satisfied and 29% saying they were at least somewhat satisfied. Only 7% said they were very dissatisfied with the offerings, and the remaining 4% noted they were somewhat dissatisfied.
Also relatively strong were reps’ opinions about their TpM’s compliance services (85% positive, 15% negative); problem resolution abilities (80% positive, 20% negative); processing operations (80% positive, 20% negative); training and support (80% positive, 20% negative); technology platform (76% positive, 24% negative); and sales support (75% positive, 25% negative).
The biggest area with room for improvement was recruiting, with 21% of respondents saying their TpM was very unhelpful with recruiting efforts and another 17% saying their TpM was somewhat unhelpful. Just over a quarter of the group said their TpM was very helpful, with the largest group, 37%, characterizing TpM assistance with recruiting as somewhat helpful.
It is difficult to know exactly how these responses—in addition to financial considerations such as fee splits between parties—might play out in terms of a decision by a bank to keep its current TpM or move to another provider.
One thing is certain, however, a move can cause numerous disruptions to bank operations, bank reps and especially bank customers. Resolving problems and improving the relationship between the bank and its TpM may in the end be a simpler and more satisfying solution.
In that regard, some of the suggestions in the survey are instructive. In the area of recruiting support, for example, a number of respondents suggested more prescreening of the candidates offered to the bank. In the technology platform arena, some respondents called for more upgrades and more user-friendly systems.
On the question of problem resolution, which is a critical piece of the TpM/ bank relationship, the most common suggestions for improvement were having designated go-to people, having more and better-trained staff and responding to problems or questions from bank reps more quickly. “Have a team of people who own the problem, rather than passing the buck all the time,” said one frus-trated respondent. Another rep said that TpMs “could do a better job of letting reps and program managers know where they go for different problems.”
In terms of training, reps said they’d like more face-to-face time, as well as additional online learning opportunities. One rep noted that “more sale-related revenue-producing ideas” would be beneficial.
Over the next several pages, we offer additional survey findings, and discuss practical tips and strategies from advisors and TpM executives to help improve the relationship and better understand the reasons that lead to banks changing providers. n
in the technology platform arena,
some
respondents called for more upgrades and
more user-friendly systems.
How satisfied are you with your TPM’s problem resolution abilities? Very Satisfied 45% Somewhat Satisfied 35% Somewhat Dissatisfied 8% Very Dissatisfied 12%
How satisfied are you with your TPM’s product offerings? Very Satisfied 60% Somewhat Satisfied 29% Somewhat Dissatisfied 4% Very Dissatisfied 7%
Have you considered switching TPMs recently?
NO
80%
YES
20%
How likely are you to change TPMs in the next year or two?
Very Unlikely 59% Somewhat Unlikely 18% Somewhat Likely 16% Very Likely 7%
How satisfied are you with your TPM’s training and support?
Very Satisfied 37% Somewhat Satisfied 43% Somewhat Dissatisfied 7% Very Dissatisfied 13%
How satisfied are you with your TPM’s sales support? Very Satisfied 32% Somewhat Satisfied 43% Somewhat Dissatisfied 10% Very Dissatisfied 15%
How satisfied are you with your TPM’s technology platform? Very Satisfied 38% Somewhat Satisfied 38% Somewhat Dissatisfied 13% Very Dissatisfied 14436_BIC_TPMsupplement_TP.indd 5 8/18/10 2:19:48 PM
A6
Providing the talent &
tools to support your success
www.ensinet.com
Please call (800)228-7531 or email us at
sales@ensinet.com to schedule a web demo with one
of our new business offi cers.
Essex National Securities, Inc. Off ers a Robust Technology Platform Featuring:
ENSInet.com now has the total integrated solution
you need to run your investment program.
An advanced rep and management dashboard
Complete assets under management analysis and tracking
Full commission accounting functionality
Advanced, customizable program reporting
Customizable sales & marketing materials
A comprehensive CRM integrated with on-line form completion
Calendar, Outlook
TMand PDA synchronization
Referral tracking
Straight through on-line brokerage account opening
The ability to integrate investment client data with your
customer information systems and on-line banking tools
harold Baker, the assistant vice president and manager for Clearfield Bank & trust in Clearfield, a smalltown located in central pennsylvania, knows a lot about changing broker-dealers. When he and other bank officers decided a year ago that it was time to make a switch, Baker says he wanted to make sure things went better than they did in one of the earlier switches he participated in at another institution.
“We had a big problem with that one,” he recalls, “because there was a timing issue between when the final statements went out to clients from the old tpm and when the new initial statements went out from the new company.” he explains, with a wry laugh, “You see, the old firm’s statements all said the clients had an account balance of zero. and they weren’t getting their new statements for several days. i’m telling you, i had people coming into the office ashen-faced thinking they’d lost everything they had! i was making calls late into the evening that day to my clients, so people wouldn’t be going to bed thinking they were penniless!”
Changing
Third-ParTy
markeTers
PreParaTion is criTical
Clearly, says Baker, preparation is the key when a bank decides to jump ship and move to a new TpM. “The big thing is communication,” says an executive with one large brokerage who has been involved in a number of such changeovers at banks.
“You don’t want your financial advisors to be unhappy or confused, and you don’t want to surprise your clients, the bank customers. especially in a down market like we’re in right now, when people have to open a new account. You can easily lose them.”
A6
Providing the talent &
tools to support your success
www.ensinet.com
Please call (800)228-7531 or email us at
sales@ensinet.com to schedule a web demo with one
of our new business offi cers.
Essex National Securities, Inc. Off ers a Robust Technology Platform Featuring:
ENSInet.com now has the total integrated solution
you need to run your investment program.
An advanced rep and management dashboard
Complete assets under management analysis and tracking
Full commission accounting functionality
Advanced, customizable program reporting
Customizable sales & marketing materials
A comprehensive CRM integrated with on-line form completion
Calendar, Outlook
TMand PDA synchronization
Referral tracking
Straight through on-line brokerage account opening
The ability to integrate investment client data with your
customer information systems and on-line banking tools
harold Baker, the assistant vice president and manager for Clearfield Bank & trust in Clearfield, a smalltown located in central pennsylvania, knows a lot about changing broker-dealers. When he and other bank officers decided a year ago that it was time to make a switch, Baker says he wanted to make sure things went better than they did in one of the earlier switches he participated in at another institution.
“We had a big problem with that one,” he recalls, “because there was a timing issue between when the final statements went out to clients from the old tpm and when the new initial statements went out from the new company.” he explains, with a wry laugh, “You see, the old firm’s statements all said the clients had an account balance of zero. and they weren’t getting their new statements for several days. i’m telling you, i had people coming into the office ashen-faced thinking they’d lost everything they had! i was making calls late into the evening that day to my clients, so people wouldn’t be going to bed thinking they were penniless!”
Third-ParTy
markeTers
Help grow your business with the support of INVEST Financial Corporation.
Call Connie Gregory and let her make your life easy, again:
800.245.4732
Or email: recruiting@investfinancial.com
www.investfinancial.com | 8745 Henderson road • suite 300 | tampa, fl | 33634 | 800-245-4732 member finra, sipc
How Can We
Make Your Life
Easier, Today?
Paper-Free Workflow with E-Signature Technology AdvisorPath™ Practice Management Platform and Virtual Sales Assistant Program
Million Dollar Practice™ Marketing Platform Geared Toward Making Every Rep a Million Dollar Producer
Choice of Clearing Platforms: Pershing or National Financial Flexible Advisory Services Program and Comprehensive Product offerings
Attractive Transition Packages High Payouts • • • • • • •
At INVEST, our passion is to make your life easy again. Hands-on client-centered service means real people ready to make your life easier every step of the way.
11fe8390-0711-72595
A Personal Touch in a High-Tech World
11fe8390_BIC_butler-ad.indd 1 7/9/2010 11:58:05 AM
I
n the current economic environment, fi-nancial institutions are facing tight profit margins and looking to add fee-based services to achieve growth. A bank or credit union’s investment program enhances the overall value proposition of the institution and can be an important component of boosting rev-enue. But in order to really thrive, the program must be efficient and deliver a quality service experience for clients. For broker-dealers serv-ing banks and credit unions, helpserv-ing institutions build successful investment programs involves three main components: Innovative, integrated technology; practice management solutions to help advisers grow their business; and a service experience that supports the unique challenges of the financial institution environment.As mature financial programs accumulate large client bases, service challenges inevitably arise. Providing quality service becomes even more demanding as customers’ needs grow more complex and regulatory concerns increase. A robust technology platform is the foundation of today’s most successful brokerage programs and the key to elevating customer service.
A broker-dealer’s back office system and front office applications should ideally create a paper-less operating environment for advisers. Elimi-nating paperwork not only saves time and allows reps to focus on client interaction, it also facili-tates compliance reviews, reduces processing time for customers, and makes the entire investment program more efficient. The technology should also be fully integrated with customer relation-ship management (CRM), account aggregation and straight-through processing functionality all available on one cohesive platform. Finally, these tools and resources must be easy for reps to use and incorporate into their practices.
Helping reps learn to use technology is a criti-cal aspect of management support, but it’s really just the tip of the iceberg when it comes to the value broker-dealers can add to an institution’s investment program. Banks and credit unions should seek out B/D partners that provide inno-vative tools and resources to help representatives grow their businesses. A truly comprehensive
practice management program includes assis-tance with marketing, generating referrals both inside and outside the branch, and strategic busi-ness development initiatives. Extensive training and educational opportunities that can be ac-cessed in a variety of ways, from online to on-site, are also crucial to helping reps continue to build their knowledge and expertise.
With time management and client service being such critical elements of a brokerage pro-gram, innovative staffing solutions can create a huge boost in productivity and efficiency. One option gaining traction is to outsource support staff to the broker-dealer home office. By hav-ing a “virtual” sales assistant who is trained and managed by the B/D, the adviser saves the con-siderable time and expense of hiring a traditional in-house assistant. The arrangement is essentially transparent to clients – they receive a high level of service from a fully-licensed professional who understands the adviser’s practice.
Compliance support, too, is a critical com-ponent of any investment program. Banks and credit unions must adhere to specific, complex regulations. As such, firms that have experienced working with financial institutions and possess a thorough understanding of their unique regula-tory issues are the most valuable partners. Ulti-mately, the institution needs to be comfortable relying on the broker-dealer to navigate the in-creasing complexity of compliance requirements and the sweeping regulatory changes that are on the horizon. By outsourcing this expertise, finan-cial institutions can focus on the things they can control – generating revenue and delivering an exceptional service experience for clients.
Finally, I’d be remiss if I didn’t address the matter of the broker-dealer’s relationship with the financial institution. Trust is one aspect, which I touched on above in discussing the im-portance of the institution being able to rely on the B/D for compliance support. But it is also a matter of understanding how the financial insti-tution environment differs from the independent space, and tailoring support and services to the representatives in that channel. Serving financial institutions involves dealing with multiple layers,
from the parent organization down to the indi-vidual branch level. All must be integrated into the broker-dealer’s overall strategy.
From the institution’s perspective, not only must the bank’s management and staff trust in the broker-dealers’s experience and expertise, they must also view the investment program as an integral part of the institution’s core service offering. Without complete buy-in and support on behalf of the financial institution, the broker-age division – and its representatives – can never reach its fully potential. Additionally, in order to ensure a long-term relationship, financial in-stitutions should seek out broker-dealers with strong financials that have demonstrated stability throughout these turbulent times.
The most successful investment programs are those built on a true business partnership be-tween the institution and the broker-dealer. Out of that partnership comes increased operational efficiency for the institution, improved produc-tivity and satisfaction for advisers and, most im-portantly, elevated service for clients.
INVEST Financial Corporation
Steve Dowden President and CEO
INVEST FINANCIAL CORPORATION
www.investfinancial.com | 8745 Henderson road • suite 300 | tampa, fl | 33634 | 800-245-4732
member finra, sipc
How Can We
Make Your Life
Easier, Today?
11fe8738-0711-72596
Building a successful financial institution investment program with
e
asy.
is
A D V E R T I S E M E N T
11fe8738_BIC_butler-ad_supplemen1 1 7/9/2010 11:56:11 AM
Help grow your business with the support of INVEST Financial Corporation.
Call Connie Gregory and let her make your life easy, again:
800.245.4732
Or email: recruiting@investfinancial.com
www.investfinancial.com | 8745 Henderson road • suite 300 | tampa, fl | 33634 | 800-245-4732 member finra, sipc
How Can We
Make Your Life
Easier, Today?
Paper-Free Workflow with E-Signature Technology AdvisorPath™ Practice Management Platform and Virtual Sales Assistant Program
Million Dollar Practice™ Marketing Platform Geared Toward Making Every Rep a Million Dollar Producer
Choice of Clearing Platforms: Pershing or National Financial Flexible Advisory Services Program and Comprehensive Product offerings
Attractive Transition Packages High Payouts • • • • • • •
At INVEST, our passion is to make your life easy again. Hands-on client-centered service means real people ready to make your life easier every step of the way.
11fe8390-0711-72595
A Personal Touch in a High-Tech World
11fe8390_BIC_butler-ad.indd 1 7/9/2010 11:58:05 AM
I
n the current economic environment, fi-nancial institutions are facing tight profit margins and looking to add fee-based services to achieve growth. A bank or credit union’s investment program enhances the overall value proposition of the institution and can be an important component of boosting rev-enue. But in order to really thrive, the program must be efficient and deliver a quality service experience for clients. For broker-dealers serv-ing banks and credit unions, helpserv-ing institutions build successful investment programs involves three main components: Innovative, integrated technology; practice management solutions to help advisers grow their business; and a service experience that supports the unique challenges of the financial institution environment.As mature financial programs accumulate large client bases, service challenges inevitably arise. Providing quality service becomes even more demanding as customers’ needs grow more complex and regulatory concerns increase. A robust technology platform is the foundation of today’s most successful brokerage programs and the key to elevating customer service.
A broker-dealer’s back office system and front office applications should ideally create a paper-less operating environment for advisers. Elimi-nating paperwork not only saves time and allows reps to focus on client interaction, it also facili-tates compliance reviews, reduces processing time for customers, and makes the entire investment program more efficient. The technology should also be fully integrated with customer relation-ship management (CRM), account aggregation and straight-through processing functionality all available on one cohesive platform. Finally, these tools and resources must be easy for reps to use and incorporate into their practices.
Helping reps learn to use technology is a criti-cal aspect of management support, but it’s really just the tip of the iceberg when it comes to the value broker-dealers can add to an institution’s investment program. Banks and credit unions should seek out B/D partners that provide inno-vative tools and resources to help representatives grow their businesses. A truly comprehensive
practice management program includes assis-tance with marketing, generating referrals both inside and outside the branch, and strategic busi-ness development initiatives. Extensive training and educational opportunities that can be ac-cessed in a variety of ways, from online to on-site, are also crucial to helping reps continue to build their knowledge and expertise.
With time management and client service being such critical elements of a brokerage pro-gram, innovative staffing solutions can create a huge boost in productivity and efficiency. One option gaining traction is to outsource support staff to the broker-dealer home office. By hav-ing a “virtual” sales assistant who is trained and managed by the B/D, the adviser saves the con-siderable time and expense of hiring a traditional in-house assistant. The arrangement is essentially transparent to clients – they receive a high level of service from a fully-licensed professional who understands the adviser’s practice.
Compliance support, too, is a critical com-ponent of any investment program. Banks and credit unions must adhere to specific, complex regulations. As such, firms that have experienced working with financial institutions and possess a thorough understanding of their unique regula-tory issues are the most valuable partners. Ulti-mately, the institution needs to be comfortable relying on the broker-dealer to navigate the in-creasing complexity of compliance requirements and the sweeping regulatory changes that are on the horizon. By outsourcing this expertise, finan-cial institutions can focus on the things they can control – generating revenue and delivering an exceptional service experience for clients.
Finally, I’d be remiss if I didn’t address the matter of the broker-dealer’s relationship with the financial institution. Trust is one aspect, which I touched on above in discussing the im-portance of the institution being able to rely on the B/D for compliance support. But it is also a matter of understanding how the financial insti-tution environment differs from the independent space, and tailoring support and services to the representatives in that channel. Serving financial institutions involves dealing with multiple layers,
from the parent organization down to the indi-vidual branch level. All must be integrated into the broker-dealer’s overall strategy.
From the institution’s perspective, not only must the bank’s management and staff trust in the broker-dealers’s experience and expertise, they must also view the investment program as an integral part of the institution’s core service offering. Without complete buy-in and support on behalf of the financial institution, the broker-age division – and its representatives – can never reach its fully potential. Additionally, in order to ensure a long-term relationship, financial in-stitutions should seek out broker-dealers with strong financials that have demonstrated stability throughout these turbulent times.
The most successful investment programs are those built on a true business partnership be-tween the institution and the broker-dealer. Out of that partnership comes increased operational efficiency for the institution, improved produc-tivity and satisfaction for advisers and, most im-portantly, elevated service for clients.
INVEST Financial Corporation
Steve Dowden President and CEO
INVEST FINANCIAL CORPORATION
www.investfinancial.com | 8745 Henderson road • suite 300 | tampa, fl | 33634 | 800-245-4732
member finra, sipc
How Can We
Make Your Life
Easier, Today?
11fe8738-0711-72596
Building a successful financial institution investment program with
e
asy.
is
A D V E R T I S E M E N T
11fe8738_BIC_butler-ad_supplemen1 1 7/9/2010 11:56:11 AM
A10 A11
WHY
Banks end their
third-party marketer
Relationships
there are many reasons banks might drop
their tpms, but the three most common ones
appear to be price, a desire to gain improved
technology or dissatisfaction with the level of
service, whether it’s problem solving, training
or recruiting new advisors.
“i’d say the main reasons banks come to us
is because they’re looking to get a broader
product array and more experienced talent,
or to strengthen recurrent revenue,” says
Dan mallard, director of strategy and consulting
at Raymond James. “and i’d have to say the
main reason they leave us is when it’s all about
price. someone else may be promising a lower
payout, or the bank may feel they’re not using
all our products—but frankly we don’t see
a lot of people dropping us.”
“the revenue split between the bank and
tpm is a big issue,” agrees paul Werlin,
principal at st. petersburg, fla.-based
human Capital Resources. “a couple of
percentage points more revenue either
way can make a big difference.”
There can be a lot to explain. Some products—annuities or mutual funds offered by the former TpM for example—may no longer be available through the new provider, so people with those particular investments need to be taken care of. If the new TpM uses a different clearing operation than the old one, the repapering process can be even more complicated.
At the same time, the very need to communicate with clients can be an opportunity. paul Vitiello, a financial advisor at the Honesdale national Bank, a community bank in Hones-dale, pa., says the repapering pro-cess done during his bank’s recent conversion from Uvest to primeVest, while “cumbersome at times,” gave him an excuse to go over all his clients’ accounts. “This was especially useful with the smaller account holders,” he says. “The ones with maybe no more than $3,000 invested.”
Sometimes, he says, he’d find people who had only $600 in their accounts and had not been doing anything with the money. These clients were being charged inactivity fees of $35 by Uvest. “Often we’d agree they might be better off moving that money into a CD,” he says. Other times, he’d find clients with inactive accounts holding $2,000 to $3,000, and he’d ask them why they weren’t doing anything with the money. “You know, very often they end up de-ciding they want to invest more when you talk with them!”
For his part, Ray Ceccotti, senior vice president for retail banking at Honesdale, says, “We actually picked up some old customers during the pro-cess of conversion.” He says there were inevitably issues that came up, “but we
talked everything through as we went.” In the end, the conversion, which took about 90 days to complete, cost rough-ly $10,000, with primeVest agreeing to absorb most of that amount.
“There’s a lot of pre-transition work that needs to be done by the bank and the two TpMs,” says Dan Mallard, director of strategy and consulting at Raymond James. “And you need a lot of communication. The more everyone involved knows, the better.” Another key to a successful transition is “full cooperation” between both TpMs. “I think for the most part, everyone does that,” he says.
Prime consideraTions
paul Werlin, principal at Human Capital Resources, in St. petersburg, Fla., says there are three things a bank needs to think about when consider-ing a change in TpM. “First you have the actual work that will be involved to get it done, and what it will cost you. Second is the impact on your reps, because they are going to have to learn a new system and new products. Third is the impact on your customers, who are going to be worried that you’re changing because of some problem.”
Werlin say that no matter how seamless it all might look during the planning stage, “a change of TpMs is going to be disruptive. You want to make sure that the payback for converting is worth the disruption.”
This statement may explain why our survey found that, despite some level of dissatisfaction with some as-pects of the bank/TpM relationship reported by respondents, only one in five reps polled said they had consid-ered switching TpMs recently. n
Changing
COnTInUeD
How satisfied are you with your TPM’s problem resolution abilities? Very Satisfied 45% Somewhat Satisfied 35% Somewhat Dissatisfied 8% Very Dissatisfied 12%
How satisfied are you with your TPM’s product offerings? Very Satisfied 60% Somewhat Satisfied 29% Somewhat Dissatisfied 4% Very Dissatisfied 7%
Have you considered switching TPMs recently?
NO
80%
YES
20%
How likely are you to change TPMs in the next year or two?
Very Unlikely 59% Somewhat Unlikely 18% Somewhat Likely 16% Very Likely 7%
How satisfied are you with your TPM’s training and support?
Very Satisfied 37% Somewhat Satisfied 43% Somewhat Dissatisfied 7% Very Dissatisfied 13%
How satisfied are you with your TPM’s sales support? Very Satisfied 32% Somewhat Satisfied 43% Somewhat Dissatisfied 10% Very Dissatisfied 15%
How satisfied are you with your TPM’s technology platform? Very Satisfied 38% Somewhat Satisfied 38% Somewhat Dissatisfied 13% Very Dissatisfied 11%
How satisfied are you with your TPM’s problem resolution abilities? Very Satisfied 45% Somewhat Satisfied 35% Somewhat Dissatisfied 8% Very Dissatisfied 12%
How satisfied are you with your TPM’s product offerings? Very Satisfied 60% Somewhat Satisfied 29% Somewhat Dissatisfied 4% Very Dissatisfied 7%
Have you considered switching TPMs recently?
NO
80%
YES
20%
How likely are you to change TPMs in the next year or two?
Very Unlikely 59% Somewhat Unlikely 18% Somewhat Likely 16% Very Likely 7%
How satisfied are you with your TPM’s training and support?
Very Satisfied 37% Somewhat Satisfied 43% Somewhat Dissatisfied 7% Very Dissatisfied 13%
How satisfied are you with your TPM’s sales support? Very Satisfied 32% Somewhat Satisfied 43% Somewhat Dissatisfied 10% Very Dissatisfied 15%
How satisfied are you with your TPM’s technology platform? Very Satisfied 38% Somewhat Satisfied 38% Somewhat Dissatisfied 13% Very Dissatisfied 11% 14436_BIC_TPMsupplement_TP.indd 10 8/18/10 2:19:52 PM
A10 A11
WHY
Why
Banks end their
third-party marketer
Relationships
there are many reasons banks might drop
their tpms, but the three most common ones
appear to be price, a desire to gain improved
technology or dissatisfaction with the level of
service, whether it’s problem solving, training
or recruiting new advisors.
“i’d say the main reasons banks come to us
is because they’re looking to get a broader
product array and more experienced talent,
or to strengthen recurrent revenue,” says
Dan mallard, director of strategy and consulting
at Raymond James. “and i’d have to say the
main reason they leave us is when it’s all about
price. someone else may be promising a lower
payout, or the bank may feel they’re not using
all our products—but frankly we don’t see
a lot of people dropping us.”
“the revenue split between the bank and
tpm is a big issue,” agrees paul Werlin,
principal at st. petersburg, fla.-based
human Capital Resources. “a couple of
percentage points more revenue either
way can make a big difference.”
talked everything through as we went.” In the end, the conversion, which took about 90 days to complete, cost rough-ly $10,000, with primeVest agreeing to absorb most of that amount.
“There’s a lot of pre-transition work that needs to be done by the bank and the two TpMs,” says Dan Mallard, director of strategy and consulting at Raymond James. “And you need a lot of communication. The more everyone involved knows, the better.” Another key to a successful transition is “full cooperation” between both TpMs. “I think for the most part, everyone does that,” he says.
Prime consideraTions
paul Werlin, principal at Human Capital Resources, in St. petersburg, Fla., says there are three things a bank needs to think about when consider-ing a change in TpM. “First you have the actual work that will be involved to get it done, and what it will cost you. Second is the impact on your reps, because they are going to have to learn a new system and new products. Third is the impact on your customers, who are going to be worried that you’re changing because of some problem.”
Werlin say that no matter how seamless it all might look during the planning stage, “a change of TpMs is going to be disruptive. You want to make sure that the payback for converting is worth the disruption.”
This statement may explain why our survey found that, despite some level of dissatisfaction with some as-pects of the bank/TpM relationship reported by respondents, only one in five reps polled said they had consid-ered switching TpMs recently. n
reduced services
Another issue, says Werlin, is service. “I’m hearing more and more complaints that TpMs, because of the current economic environment, have made cutbacks in their personnel. They’re providing less service and are slower about fixing problems, answering questions from bank advisors, etc.” Valerie Seyfert, president and CeO of CUSO Financial Services and Sorrento pacific Financial agrees. “Right now, a lot of moves by banks to new TpMs are happening because of the changes taking place in the broker-dealer community, such as going public, reductions in staff and services and so on. When a company changes ownership, or begins to operate in a different way, a bank may say, ‘Hey, this isn’t a good match for us anymore.’”
Over the next 20 years, baby boomers are expected to transfer trillions in wealth to their heirs. To attract these assets to their practice, fi nancial advisors must develop more effective strategies to communicate with prospects and clients and meet more of their needs. If you’re partnered with the right broker-dealer, you can go head-to-head with even the biggest full-service banks that are relentless in their quest for a bigger share of prime customers’ wallets.
Forward-thinking bank fi nancial advisors can compete more effectively by partnering with Investment Professionals, Inc. (IPI) in a collaborative investment program. Based on shared objectives and rewards, working alongside IPI can put your practice on a path to sustainable success.
Founded in 1992, IPI is a private, Texas-based fi nancial planning, asset management, and risk mitigation fi rm with $4.2 billion under management and 45,000 clients nationwide. IPI is a leading provider of on-site bank investment programs and currently partners with more than 130 fi nancial institutions with assets ranging from $35 million to over $7 billion. IPI also operates three retail branches in Texas. In seven American Brokerage Consultants’ Studies of Bank Brokerage and Retail Investment Services over 12 years from 1997-2009, bank executives nationwide (cumulatively and over) cast over 2,200 votes in favor of IPI. In 2008 IPI was voted the Most Highly Rated Bank Brokerage Firm for an unprecedented fourth time.1
In addition to being one of the fastest-growing companies in San Antonio,2 IPI has been named
one of the Best Companies to Work for in Texas for three years in a row.3
keys to suCCess:
turnkey MarketinG proGraMs
IPI continues to excel in the bank brokerage industry in Marketing Effectiveness, Marketing Expertise, Marketing Materials and Marketing Scope. IPI was ranked No. 1 in all four marketing categories in American Brokerage Consultants’ (ABC) 2008 survey of 261 bankers nationwide. Our approach is about building turnkey marketing programs, testing them and coaching fi nancial advisors in how to use them for maximum effectiveness.Our marketing programs are designed to enable frequent communication with clients and prospects so that the advisor is top-of-mind when a need arises. From marketing strategies for building quality prospect lists to a fully-stocked Marketing Library of topical articles, our resources boost advisor productivity. IPI also works with our bank partners to build their brands and prestige in the community, further driving prospects to your doorstep. Our strategies are market neutral – they are as effective in small town America as they are in larger metropolitan areas.
keys to suCCess:
FinanCial advisor traininG,
CoaChinG and 360° support
In the 2008 ABC study IPI received a No. 1 grade for Quality & Effectiveness of Sales Management – an achievement tied to our focus on addressing individual fi nancial advisor challenges. And for the third year in a row IPI was ranked No. 1 in Quality of Training (please source) – a result related to the substantial resources we allocate to this key function.
In the fi rst year of each bank investment program, we spend over $32,000 on average training a new fi nancial advisor to do business using IPI’s proven approach to success. Advisors attend a three-day training session in our San Antonio headquarters and participate in our StartRight program. Both start-ups and replacement programs benefi t from the solid foundation we establish during the fi rst 90 days of a new program. In addition to our regular schedule of ongoing training in weekly and monthly modules, IPI principals travel to conduct special advisor trainings on-site.
Our ability to help advisors boost revenues is linked to our unique focus on and affi nity with community banks and their customers. According to Scott A. Barnes, IPI’s Founder, “Our business grew up building profi table investment programs for community banks – with IPI team members who also grew up in smaller community environments. This is how we’ve developed the insights, methods and relationships that have propelled IPI to a record of acclaim rivaling any broker-dealer in our industry.”
investMent proFessionals, inC.
A DV E R T O R I A LBIC_AD_REV.indd 2 8/2/10 11:51 AM
NO BANK GUARANTEE | NOT FDIC INSURED | MAY LOSE VALUE All Securities and Advisory Services offered through Investment Professionals, Inc. (IPI), a Registered Broker/Dealer and Registered Investment Advisor and member FINRA and SIPC. The investment services offered by IPI are in no way affiliated with or offered by the bank or credit union where IPI may maintain an office. Customers work solely through IPI with respect to their investment, brokerage and securities transactions. IPI does not offer or provide legal or tax advice. Please consult your attorney and/or tax advisor for such services. The products offered by Investment Professionals, Inc. are not insured by the FDIC, the NCUA or any other agency of the government, are not deposits or other obligations for the bank or guaranteed by the bank and involve investment risks, including possible loss of principal amount invested. Source 1: Most recent study done in 2008 national “Studies of Bank Brokerage and Retail Investment Services” conducted by American Brokerage Consultants (ABC), St. Petersburg, FL, and Bank Investment Consultant Magazine, New York, NY. In the most recent 2008 study, a total of 2,024 banks offering retail investment programs were surveyed and 14.6% responded. ABC asked banks to rank their individual investment programs; responses were aggregated and compared against the results of all broker-dealers in the survey. Past ABC rankings may not be indicative of future rankings. In seven studies performed by American Brokerage Consultants’ Studies of Bank Brokerage and Retail Investment Services over the last 12 years from 1997-2009, IPI has received over 2,200 survey responses from bank executives and has been rated the most highly rated bank/brokerage firm. Source 2: San Antonio Business Journal. Rankings based on three-year annual revenue growth rates of companies headquartered in greater San Antonio. Data analysis by an independent auditing firm. Source 3: 2009 study sponsored by the Texas Association of Business, TSCSHRM and Best Companies Group. Confidential survey and data analysis conducted by an independent research firm. © 2010 Investment Professionals, Inc.
The good news for financial advisors is that most people need financial services. So if they’re not getting them from you, they’re getting them somewhere else.
There are customers out there who could be yours – IF you know how to talk to them and can offer customized products and services that will enhance their long-term financial security.
of the financial services market in your community
Capture your share
unloCk the true
potential
of your practice
800-923-4220
www.invpro.com
“
Unlock Your True Potential
”
ContaCt us today to reCeive
kit
your
BIC_AD_REV.indd 1 8/2/10 11:51 AM
Over the next 20 years, baby boomers are expected to transfer trillions in wealth to their heirs. To attract these assets to their practice, fi nancial advisors must develop more effective strategies to communicate with prospects and clients and meet more of their needs. If you’re partnered with the right broker-dealer, you can go head-to-head with even the biggest full-service banks that are relentless in their quest for a bigger share of prime customers’ wallets.
Forward-thinking bank fi nancial advisors can compete more effectively by partnering with Investment Professionals, Inc. (IPI) in a collaborative investment program. Based on shared objectives and rewards, working alongside IPI can put your practice on a path to sustainable success.
Founded in 1992, IPI is a private, Texas-based fi nancial planning, asset management, and risk mitigation fi rm with $4.2 billion under management and 45,000 clients nationwide. IPI is a leading provider of on-site bank investment programs and currently partners with more than 130 fi nancial institutions with assets ranging from $35 million to over $7 billion. IPI also operates three retail branches in Texas. In seven American Brokerage Consultants’ Studies of Bank Brokerage and Retail Investment Services over 12 years from 1997-2009, bank executives nationwide (cumulatively and over) cast over 2,200 votes in favor of IPI. In 2008 IPI was voted the Most Highly Rated Bank Brokerage Firm for an unprecedented fourth time.1
In addition to being one of the fastest-growing companies in San Antonio,2 IPI has been named
one of the Best Companies to Work for in Texas for three years in a row.3
keys to suCCess:
turnkey MarketinG proGraMs
IPI continues to excel in the bank brokerage industry in Marketing Effectiveness, Marketing Expertise, Marketing Materials and Marketing Scope. IPI was ranked No. 1 in all four marketing categories in American Brokerage Consultants’ (ABC) 2008 survey of 261 bankers nationwide. Our approach is about building turnkey marketing programs, testing them and coaching fi nancial advisors in how to use them for maximum effectiveness.Our marketing programs are designed to enable frequent communication with clients and prospects so that the advisor is top-of-mind when a need arises. From marketing strategies for building quality prospect lists to a fully-stocked Marketing Library of topical articles, our resources boost advisor productivity. IPI also works with our bank partners to build their brands and prestige in the community, further driving prospects to your doorstep. Our strategies are market neutral – they are as effective in small town America as they are in larger metropolitan areas.
keys to suCCess:
FinanCial advisor traininG,
CoaChinG and 360° support
In the 2008 ABC study IPI received a No. 1 grade for Quality & Effectiveness of Sales Management – an achievement tied to our focus on addressing individual fi nancial advisor challenges. And for the third year in a row IPI was ranked No. 1 in Quality of Training (please source) – a result related to the substantial resources we allocate to this key function.
In the fi rst year of each bank investment program, we spend over $32,000 on average training a new fi nancial advisor to do business using IPI’s proven approach to success. Advisors attend a three-day training session in our San Antonio headquarters and participate in our StartRight program. Both start-ups and replacement programs benefi t from the solid foundation we establish during the fi rst 90 days of a new program. In addition to our regular schedule of ongoing training in weekly and monthly modules, IPI principals travel to conduct special advisor trainings on-site.
Our ability to help advisors boost revenues is linked to our unique focus on and affi nity with community banks and their customers. According to Scott A. Barnes, IPI’s Founder, “Our business grew up building profi table investment programs for community banks – with IPI team members who also grew up in smaller community environments. This is how we’ve developed the insights, methods and relationships that have propelled IPI to a record of acclaim rivaling any broker-dealer in our industry.”
investMent proFessionals, inC.
A DV E R T O R I A LBIC_AD_REV.indd 2 8/2/10 11:51 AM
NO BANK GUARANTEE | NOT FDIC INSURED | MAY LOSE VALUE All Securities and Advisory Services offered through Investment Professionals, Inc. (IPI), a Registered Broker/Dealer and Registered Investment Advisor and member FINRA and SIPC. The investment services offered by IPI are in no way affiliated with or offered by the bank or credit union where IPI may maintain an office. Customers work solely through IPI with respect to their investment, brokerage and securities transactions. IPI does not offer or provide legal or tax advice. Please consult your attorney and/or tax advisor for such services. The products offered by Investment Professionals, Inc. are not insured by the FDIC, the NCUA or any other agency of the government, are not deposits or other obligations for the bank or guaranteed by the bank and involve investment risks, including possible loss of principal amount invested. Source 1: Most recent study done in 2008 national “Studies of Bank Brokerage and Retail Investment Services” conducted by American Brokerage Consultants (ABC), St. Petersburg, FL, and Bank Investment Consultant Magazine, New York, NY. In the most recent 2008 study, a total of 2,024 banks offering retail investment programs were surveyed and 14.6% responded. ABC asked banks to rank their individual investment programs; responses were aggregated and compared against the results of all broker-dealers in the survey. Past ABC rankings may not be indicative of future rankings. In seven studies performed by American Brokerage Consultants’ Studies of Bank Brokerage and Retail Investment Services over the last 12 years from 1997-2009, IPI has received over 2,200 survey responses from bank executives and has been rated the most highly rated bank/brokerage firm. Source 2: San Antonio Business Journal. Rankings based on three-year annual revenue growth rates of companies headquartered in greater San Antonio. Data analysis by an independent auditing firm. Source 3: 2009 study sponsored by the Texas Association of Business, TSCSHRM and Best Companies Group. Confidential survey and data analysis conducted by an independent research firm. © 2010 Investment Professionals, Inc.
The good news for financial advisors is that most people need financial services. So if they’re not getting them from you, they’re getting them somewhere else.
There are customers out there who could be yours – IF you know how to talk to them and can offer customized products and services that will enhance their long-term financial security.
of the financial services market in your community
Capture your share
unloCk the true
potential
of your practice
800-923-4220
www.invpro.com
“
Unlock Your True Potential
”
ContaCt us today to reCeive
kit
your
BIC_AD_REV.indd 1 8/2/10 11:51 AM
A14 A15 One way the changes show up, she
says, is in reduced service. “A bank may have had a person at their TpM that the program manager and the reps related to well, and then suddenly that person’s gone. Or there may have been things that had been promised to them and suddenly those services are no longer provid-ed or have gotten worse.”
Cutbacks in staffing and level of services at TpMs are felt most at smaller banks. According to one executive at a TpM firm, TpMs are looking for the advantages of scale, and often see the smaller banks that have only a handful of advisors as not profitable, so they tend to reduce their services to those institutions.
beTTer Technology
An additional reason banks move to another TpM, says Seyfert, is improved technology. “If a bank’s program is growing, it may be a good reason to move,” she says. “Invest-ment services may represent a small percentage of a bank’s customers, but that means that there is a lot of upside potential, and the easier it is to reach everyone the better.”
For Harold Baker, assistant vice president at Clearfield Bank & Trust in Clearfield, pa., all three of these reasons figured into the decision to change TpMs. “The first issue was finances,” he says. “I felt we weren’t
receiving an adequate payout for the work we were doing with our exist-ing TpM. In addition, it seemed like their service was deteriorating. ev-ery time we called, we’d get a new person, and he or she didn’t know all the answers to our questions. plus their internal relationships person would take days to answer an email or return a call. Finally I felt that the technology could be better. They were still using a lot of paper.”
Baker says in doing his due diligence about the switch, he looked at 10 broker-dealers and had face-to-face meetings with six, before settling on Sorrento Financial Services. He says the firm offered a good fee split, great service and a web-based system with customer records online. “Our costs are probably 20% to 25% lower now, and we’re making about 10% to 12% more from the investment side than we were with the old TpM,” he says.
“It’s actually a good time to be shopping for a new TpM,” says one executive in the industry who has worked at both broker-dealers and banks. “It’s gotten very competitive out there, and TpMs are offering a lot to capture new clients.” He adds that with products and services be-coming increasingly “commoditized,” banks are freer to negotiate on price, which he says “is very much a matter for negotiation.” n
WHY
COnTInUeDBest practices
How satisfied are you with your TPM’s problem resolution abilities? Very Satisfied 45% Somewhat Satisfied 35% Somewhat Dissatisfied 8% Very Dissatisfied 12%
How satisfied are you with your TPM’s product offerings? Very Satisfied 60% Somewhat Satisfied 29% Somewhat Dissatisfied 4% Very Dissatisfied 7%
Have you considered switching TPMs recently?
NO
80%
YES
20%
How likely are you to change TPMs in the next year or two?
Very Unlikely 59% Somewhat Unlikely 18% Somewhat Likely 16% Very Likely 7%
How satisfied are you with your TPM’s training and support?
Very Satisfied 37% Somewhat Satisfied 43% Somewhat Dissatisfied 7% Very Dissatisfied 13%
How satisfied are you with your TPM’s sales support? Very Satisfied 32% Somewhat Satisfied 43% Somewhat Dissatisfied 10% Very Dissatisfied 15%
How satisfied are you with your TPM’s technology platform? Very Satisfied 38% Somewhat Satisfied 38% Somewhat Dissatisfied 13% Very Dissatisfied 11%
How satisfied are you with your TPM’s problem resolution abilities? Very Satisfied 45% Somewhat Satisfied 35% Somewhat Dissatisfied 8% Very Dissatisfied 12%
How satisfied are you with your TPM’s product offerings? Very Satisfied 60% Somewhat Satisfied 29% Somewhat Dissatisfied 4% Very Dissatisfied 7%
Have you considered switching TPMs recently?
NO
80%
YES
20%
How likely are you to change TPMs in the next year or two?
Very Unlikely 59% Somewhat Unlikely 18% Somewhat Likely 16% Very Likely 7%
How satisfied are you with your TPM’s training and support?
Very Satisfied 37% Somewhat Satisfied 43% Somewhat Dissatisfied 7% Very Dissatisfied 13%
How satisfied are you with your TPM’s sales support? Very Satisfied 32% Somewhat Satisfied 43% Somewhat Dissatisfied 10% Very Dissatisfied 15%
How satisfied are you with your TPM’s technology platform? Very Satisfied 38% Somewhat Satisfied 38% Somewhat Dissatisfied 13% Very Dissatisfied 11%
How satisfied are you with your TPM’s problem resolution abilities? Very Satisfied 45% Somewhat Satisfied 35% Somewhat Dissatisfied 8% Very Dissatisfied 12%
How satisfied are you with your TPM’s product offerings? Very Satisfied 60% Somewhat Satisfied 29% Somewhat Dissatisfied 4% Very Dissatisfied 7%
Have you considered switching TPMs recently?
NO
80%
YES
20%
How likely are you to change TPMs in the next year or two?
Very Unlikely 59% Somewhat Unlikely 18% Somewhat Likely 16% Very Likely 7%
How satisfied are you with your TPM’s training and support?
Very Satisfied 37% Somewhat Satisfied 43% Somewhat Dissatisfied 7% Very Dissatisfied 13%
How satisfied are you with your TPM’s sales support? Very Satisfied 32% Somewhat Satisfied 43% Somewhat Dissatisfied 10% Very Dissatisfied 15%
How satisfied are you with your TPM’s technology platform? Very Satisfied 38% Somewhat Satisfied 38% Somewhat Dissatisfied 13% Very Dissatisfied 11% 14436_BIC_TPMsupplement_TP.indd 14 8/18/10 2:19:56 PM
