SAN DIEGO - Trust officers have to get away from the vault to thrive today.
That was the message that Jack Jackson, a former American Airlines executive who believes he knows something about industry change, delivered to trust executives attending a Bank Marketing Association conference here recently.
Mr. Jackson likened bankers to airline pilots, who used to be reluctant to leave the cockpit to chat with passengers because, they said, "we're professionals."
Pilots had to realize that they were transporting people, not airplanes. Likewise, trust bankers have to get out from behind the vault to meet the customers buying the products, he said.
Mr. Jackson's comments reflected the mood at the three-day meeting, which featured bankers and consultants bashing the stodgy old trust department.
For its part, the Bank Marketing Association has embraced the concept of shedding old models. It renamed the gathering the Investment Management and Trust Marketing Conference to highlight the growing importance of investment management. The designated theme: "Reinventing Our Business."
This year, the conference attendance jumped 10% to more than 300 people, of whom about 225 were bankers, association officials said.
Though some seasoned conference-goers said they were jaded at such calls for change, most agreed that competitive forces will lead to evolution.
"It's looking more urgent than it used to," said John Ziegler, trust division manager for Santa Barbara Bank and Trust. That's because competition is coming "from everybody."
In fact, trust bankers were intent on business even in the midst of pleasant diversions along the shore of San Diego Harbor.
Few bankers at a reception sponsored by Federated Investors, for instance, paid more than passing attention to a jugler of knives or the four-piece band playing Beach Boys songs. Talking shop and listening to calls for action seemed more important.
"We need to break the old paradigm and provide wealth management services," said William L. Timoney, senior vice president of Wells Fargo Bank, during opening remarks to the conference.
"You've got to be much more aggressive, real competitors," said David Cates, a consultant with Towers Perrin in San Francisco. He said that the competition for trust comes from brokerages, small boutiques, accountants, and lawyers.
Small boutiques with excellent backgrounds are vying for business, and national brokerages are leveraging national distribution networks with advertising and marketing, he said. That's tearing into bank's business.
Referrals Dry Up
"That big book of high-margin business is gradually winding down," Mr. Cates said.
But, the competitors aren't just on the outside. Mr. Cates said that many trust bankers complain that referrals from branch personnel have been drying up over the past six months as they strive to meet new referral goals for mutual fund sales.
"There is a tendency today to say, if I'm in doubt they are probably a mutual fund customer," Mr. Cates said.
In Sales Techniques
Many speakers said there has been too much focus on internal referrals at the expense of developing outside leads.
Throughout the conference, speakers advised trust bankers to innovate in developing new business, build more daring sales techniques, and keep top producers under the bank's roof.
"One of you're key strengths as a bank is the continuity and ability of your staff," Mr. Cates said. "Retention of your good people is so important - you can't risk losing them and you can't risk losing the book of business that goes with them."