CHICAGO - You've got to spend money to make money. That was the battle cry of a trust and private banking conference held here last week.
About 30 bankers attended the two-day event, sponsored by ICM Conferences Inc., and most agreed that banks need to increase sales efforts in order to stave off nonbank competition.
"Nobody ever walks into a trust or banking organization with a pen and asks, 'Where do I sign up?' You really have to hustle to get these clients," said Daniel J. Wroblewski, senior vice president of First Interstate of California.
The bankers agreed that they are all good at competing with each other, but have to make more concerted efforts to compete with nonbanks.
In opening remarks, consultant David Ross Palmer, the conference chairman, took bankers to task for letting nonbanks pick off their clients.
"The banks are losing it big time," Mr. Palmer said. "You've got to do something about that."
Speakers lined up with suggestions. Mr. Wroblewski said First Interstate uses a myriad of leads to snare new clients. For instance, his private banking group compensates branch workers for referrals, a practice other bankers said was unusual.
While most banks segment their clientele by profession or net worth, First Interstate takes the process much further, studying how clients differ from neighborhood to neighborhood, Mr. Wroblewski said.
He also encourages his staff to be resourceful in their quest for new business. He wants them to scour data bases, tap lawyers and accountants for leads, study newspaper articles for names of heavy hitters, befriend family office directors, and mix with the wealthy in social settings.
"We look for leads under the sofa - it's like looking for change between the pillows," Mr. Wroblewski said. "You've got only one shot at the prospect."
Some participants acknowledged that banks may not be the first place people turn when they need financial advice.
"Unfortunately, as an industry, we're not known for responsiveness to clients," said Erin E. McInerney, senior vice president of Harris Bank and Trust Co., Chicago.
She said it is crucial for banks to show clients easy ways to tap into trust and private banking services. Harris' approach - putting a single relationship manager in charge of a client through all phases of his or her financial life - has helped boost assets dramatically, Ms. McInerney added.
Banc One Corp., Columbus, Ohio, thinks it has convinced customers that a bank can provide sound financial advice and good service - and it's backing up its claims with a money-back guarantee.
High-net-worth clients in Banc One's Texas unit get a service contract when they sign on, said Gary Horby, managing director of Banc One Investment Management and Trust Group.
If the client is dissatisfied or dismayed with the accessibility and ability of a bank officer, he can demand his fees back. In the two years such contracts have been signed, he said only one disgruntled Texan lassoed in fees.
Conferences are considered a great forum for networking, but two attendees got more than they bargained for.
Mr. Palmer, the chairman, practically dragged two bankers together at a Wednesday morning session, bellowing "CoreStates, meet Meridian." A planned merger between the two banks had been announced the day before.
The bankers, Louis Vilardo, vice president of Meridian Asset Management, and Jon Anderson, senior vice president of CoreStates Bank, shook hands amicably before taking their seats.
Although the two men both work in Philadelphia, they did not know each other before the meeting.
Besides rubbing elbows with each other, bankers got to meet and hear from competitors. Rahul Gupta, vice president of strategic marketing at Fidelity Investment Services, spoke about sales pitches and aggressive marketing.