Bank Investment Consultant
When PNC Bank introduced platform reps to its investment program five years ago, senior financial consultant Chris Battistone was taken aback.
Investment advisers had been the only licensed people in the branches of the PNC Financial Services Group Inc. unit, and the prospect of entry-level competitors angling for the same branch business came at him like a blow. For many advisers who are new to banks, the idea of training platform reps can seem at first like raising an army of opponents. At best, it adds the apparently unproductive role of baby-sitting to a full-time sales job that is already overwhelming.
But as Mr. Battistone discovered over time, well-trained reps can significantly boost an adviser’s production by passing on both qualified referrals and overrides — the cut of the commission earned by a platform rep that goes to the adviser. He estimates that 35% of his book has come from platform referrals alone.
The trouble is that many platform reps do not really know how to refer business, and many advisers do not know how to teach them.
“The platform rep is often afraid of introducing certain investment products because there is such a broad range of them, and there’s a fundamental knowledge gap,” said Marsha Burak, a vice president at the training firm Kaplan Inc. in Chicago, a unit of Washington Post Co. If the reps do not understand how an investment product works, they won’t try to sell it. And if they don’t uncover a potential customer’s need, they won’t refer business to the adviser. The challenge for an adviser is changing that mindset — and their own.
This means that advisers, too, need some training.
“I’m a good salesman, but I’m not good at the emotional, tender-loving side of it,” said Steven Fuerbacher, an investment executive at Synergy Bank in Cranford, N.J. “Ultimately, I wanted to get branch staff to do things they were uncomfortable doing.” The bank helped Mr. Fuerbacher by hiring FTC Methods in Boonton, N.J., to train both advisers and platform reps.
“Immediately after the training there was a buzz in my branches, both from the branch managers and the bankers,” Mr. Fuerbacher said. “Instead of beating them up and telling them to do better, I now ask how I can help them.”
Advisers at Huntington Bank in Columbus, Ohio, have forged such successful relationships with platform reps that the subsidiary of Huntington Bancshares Inc. has gone into the business of training advisers at other banks.
Nationally, advisers’ override income comes from a meager average revenue of $9,815 a year of product sales per platform rep, according to Ken Kehrer, the director of research at Kehrer-Limra, a Princeton, N.J., consulting firm. But at Huntington, platform reps’ average production is nearly triple that, about $28,000.
At the bank’s training unit, Huntington Consulting Services, “we teach financial advisers the mindset that they’re not only advisers but [also] coaches, mentors, and wholesalers,” said Rob Comfort, the president of Huntington Investment Co. It starts with clearly defining that role as a big part of advisers’ daily responsibilities. “Platform reps have a lot to juggle,” he said, “so we’re fighting for shelf space by winning their hearts and minds so they’ll make investments a priority.”
This means nurturing reps and learning what is important to them. “Advisers have to be very intentional about that — platform reps won’t help advisers to sell unless they believe the adviser cares,” Mr. Comfort said. Caring does not come naturally: Any time an adviser spends on teaching a platform rep the intricacies of an annuity or a mutual fund is time taken from selling one.
“It’s a huge problem,” Mr. Comfort said. Huntington’s training starts with a two- or three-day workshop, but the follow-up never ends.
Dennis Budinich, a partner at FTC Methods, recently wrapped up a 10-week training course at New Alliance Bank in New Haven, Conn. “It’s a strong retail bank, and advisers’ relationships with bankers were friendly,” he said. “But the advisers just weren’t getting business from them. The advisers had to realize that bankers don’t have to help them.”
If investment business at a banker’s branch does not grow, it doesn’t really affect his or her job. “You’re basically building a sense of volunteerism by building relationships with them,” Mr. Budinich said.
Mr. Budinich’s course had New Alliance advisers cultivate branch managers first because they need the boss’ buy-in if they plan to pull employees away from other duties. “Advisers must coordinate with branch managers to make sure that the time taken to train platform reps is as convenient as possible for retail,” he said. He tells advisers to sit down with branch managers and interview them for 30 or 40 minutes about their lives, their families, and, for example, their proudest professional moment.
Advisers are led through a similar process with platform reps. Through personal conversations, they get a better understanding of what branch bankers think about and do each day. This helps them work in ways that make platform reps’ lives easier. For example, an adviser could pitch in on a call night, when bankers phone customers after hours to generate more business in slow months. If the adviser helps out by making calls about both investments and core deposits, bankers are more likely to return the favor over time.
Once you have platform reps on your side, the next step is to make them comfortable with sales. “Branch staff are generally uncomfortable with this because they don’t want to get rejected,” Mr. Budinich said. “Asking for a referral is the only time most bankers will get knocked back, which is why they tend not to do it.” He has trained more than 200 advisers to coach their platform reps on how to handle rejection, a fear he called “the biggest obstacle to referrals.”
Platform reps operate best when they are trained to help people, so it is important to focus on issues, not products. If the banker knows a client has young children, he or she can start a conversation about their education, which can lead to talk about a 529 college savings plan. “The cost of the school is the issue, the problem,” he said. “Then we can talk about the product.”
Role-playing can help branch employees anticipate real-life scenarios. Mr. Budinich runs advisers through six or seven scenarios that all end in a positive outcome. When it comes to an actual client, the platform rep goes into the conversation expecting it to result in a referral. If it does not, the rep is prepared to see this as an anomaly.
This training can help boost referrals in the short term, but advisers must back it up by regularly meeting with bankers. “It’s difficult to maintain their enthusiasm,” Synergy Bank’s Mr. Fuerbacher said. “So we hold monthly meetings, look at individual production, and discuss what’s in the pipeline. But all the time, we’re sharing success, and we always focus on the positive.”
Huntington requires its advisers to give each platform rep 45 minutes of one-on-one training per week, and advisers are encouraged to take reps on joint meetings with clients. “Advisers are continuously training their licensed bankers,” Mr. Comfort said.
Recognizing platform reps’ success also helps keep them involved. “Getting branch staff to refer qualified people is the most important thing to achieve,” PNC’s Mr. Battistone said. “We have regular meetings in which I identify consistent performers. I also e-mail them to thank them for their performance.”
The intangible reward for advisers who are good coaches is that it makes the job more fun. “I thoroughly enjoy coming to work now,” Mr. Fuerbacher said. “It makes it that much easier to know that the branch staff like coming to work, and we’re all at 10 on the dial. I’m up, and they’re up with me.”
