Borrowing a time-honored tradition from the securities industry, banks are increasingly using vacation trips to reward their top-producing brokers.
A number of banks, including First Bank System Inc., PNC Bank Corp., and Deposit Guaranty Corp. are sending their best representatives to sojourn in places like Mexico, Jamaica, and Alaska.
"We felt from a competitive standpoint, we needed to put something in place to attract the best reps," said Joe Tessmer, president of the brokerage at First Bank System, Minneapolis.
Any good sales organization provides "significant incentives," Mr. Tessmer said.
The use of travel incentives comes as banks are grappling with ways to build sales cultures that can compete with nonbanks such as Merrill Lynch & Co. and Charles Schwab & Co.
In past years, banks taking their first steps into the brokerage business relied on incentives provided by mutual funds firms that supplied them with investment products. But many bankers realized that such a system led to brokers pushing the products of a particular fund company, regardless of performance.
Like other institutions, banks that use trips as incentives give brokers a sales goal. In the case of First Bank, it's at least $300,000 in gross annual sales. Banks will usually pay for hotel accommodations, meals, golf, and other recreational activities for brokers and their spouses.
But it's not all play for the lucky representatives. Brokers are almost always required to attend a business function, a seminar on sales techniques, or a thank-you speech from the boss. That's because the Internal Revenue Service would tax the brokers for receiving the awards if the trips weren't work-related, Mr. Tessmer said.
Last February, about 30 of First Bank's 215 investment representatives took a trip to Puerto Vallarta, Mexico. In the previous year, when the bank instituted the program, brokers visited Hawaii.
At Pittsburgh-based PNC, brokers are rewarded not just for pulling in money, but also for referring customers to other parts of the bank. Brokers are expected to refer appropriate customers to the private bank, lending department, or other divisions.
"Teamwork within the bank is critical of our success," said Joel Calvo, president of PNC Brokerage Corp.
He likes to spur his 225 investment consultants by offering one big vacation a year and some weekend trips to a nearby bed and breakfast. This year, about 50 representatives and their spouses traveled to New York City to mix business with pleasure.
Brokers met with the portfolio managers of PNC's mutual funds and attended seminars on investment management given by business school professors.
But the representatives took plenty of time for a cruise around Manhattan and checked out the Broadway musical "How To Succeed In Business Without Really Trying."
"We were in the front row," Mr. Calvo said. "It was hilarious."
Smaller banks can't afford to send their brokers to too many far-flung resorts. But they still like to use trips as motivation for their brokers.
"We're pretty lean and mean here," said Alan Leach, president of the brokerage at $2.3 billion-asset Deposit Guaranty, Jackson, Miss. "I just don't have those kinds of dollars to throw around."
But by the winter, Mr. Leach will pack his best brokers into vans for a weekend getaway to "one of the garden spots of the universe" - the Gulf Coast resort of Point Clear, Ala.
Almost 50 brokers who work in various banks for the Tampa-based investment marketing company Invest Financial Corp. went on a cruise from Vancouver to Alaska last week - along with chairman Merlin Gackle.
