"We're thinking of hiring a couple of bright graduates," said David Thomas, managing director of Boston Eastern Portfolio Advisers.
My ears perked up. This is important stuff for college professors. If you can't get your students placed, you're like a restaurant that's closed for lunch.
"What talents are you looking for?" I asked.
Dave's answer didn't stress math, security analysis, and the other topics you would think a firm that helps community banks with portfolio planning and risk management should stress.
Remembering Banks' Needs
Rather, Dave said, "We're looking for people who can take a somewhat complicated idea and communicate it in a way the client understands.
"They should be able to discern ways in which each bank feels it is different from all others, should be able to take this uniqueness, identify sources of knowledge and information, and then turn this into a package of ideas that remembers what the bank is in business for.
"Basically, what we want is someone who listens."
Many community bankers will undoubtedly say "Amen" to Dave Thomas' description of what an adviser going into his bank should stress.
For all too often the adviser doesn't know enough about the client to be useful. He doesn't hear what the bank wants and needs, so obviously he can't solve its problems.
Hearing Dave talk, I changed my mind as to which students of mine I might send to him for interviews -- switching from the rather rigid straight-A student to the one with enthusiasm, excitement, entrepreneurial spirit, and common sense.
Of course, talking to Dave and other consultants about their problems, I find that this desire for communication and listening is a two-way street.
Risk Management
Most consultants are pretty proud of what they offer. In Eastern Portfolio's case, it is helping its client banks switch from risk avoidance to risk management, accompanied by the bank's being adequately compensated for the risk it does take.
His company, wholly owned by the Eastern Bank of Lynn, Mass., prides itself on working on an annual fee basis. So it doesn't get involved in the conflict of interest that may develop when revenues depend on placing the community banks it advises into securities whose commissions pay the freight.
This confidence consultants have in what they do helps explain why The Wall Street Journal has recently reported that more and more consultants are willing to work on a contingent fee basis - only being paid when they can do something that provides dollars and sense benefit to the clients.
Sign of Weakness
But Thomas' concern is that all too often, unless the CEO is confident in what he does, he may not want to listen to a consultant for he feels it might be taken as a sign he doesn't know what he is doing if he has to rely on an outsider to help him structure the portfolio to maximize the bank's net interest income.
This is why most consultants admit that their business is best when the banks are facing difficulties, and thus can tie their advice more directly to what the bank is facing.
Another challenge consultants face is that sometimes the best advice they can give is to not do something.
An example is the suggestion that Thomas makes to clients that they should avoid derivatives and any other instrument the banker doesn't understand, similar to his caution that there is no reason to rush into buying a security just because the salesman says that this is an "opportunity" that may disappear if not taken up immediately.
"My job is to explain to the CFO that no deal is worth rushing into without quantifying the risk. There will always be another deal."
A Return to Consulting
The same front-page column in The Wall Street Journal that talks about consultant fees also says most bright MBA graduates at some schools are going back into consulting again, after a period in which this wasn't a favored career path.
I just wish that my students and those at other business schools could hear that plea of David Thomas when he said that more important than math, accounting, or finance, a consultant needs to know how to emphasize and to listen.
