Secrets to Success: Join Our Ongoing Discussion with the Top Program Managers

Banks of all sizes and from all over the country were invited in March to submit their program managers for consideration. As you can see, we gathered a great deal of information on these managers' programs, but the ranking itself is simply based on the average production of the advisors working under each program manager. For years, Ken Kehrer, director of consulting firm Kehrer-LIMRA in Princeton, N.J., has studied the factors that make the best-practice firms successful. He says the way program managers run their businesses plays an enormous role.

Note the difference that a well-run program has on advisors' production. Advisors at best-practice banks in Kehrer's 2007 study, Attributes of Best Practices Bank Brokerage Firms, averaged annual gross commissions of $385,801, compared with $244,552 at other banks. Advisors in the programs of BIC's Top 20 Program Managers did even better, averaging $410,601 in production.

Fee-based business is not yet a significant differentiator for best-practice programs because fee accounts haven't been around long enough to gauge their impact, but Kehrer says that within a few years, fees will have a noticeable effect on the best programs. Indeed, almost half of the BIC Top 20 Program Managers' programs now earn more than 20% of their revenue from fee business, and at many other programs fee revenues are in the teens.

Best-practice banks are more likely to use sales assistants more intensively than other banks, yet banks tend to discourage program managers from hiring too many sales assistants because they cost money and don't generate revenue. The best program managers find a way to hire sales assistants because they understand how much that help contributes to higher production. Best-practice programs in Kehrer's study had one sales assistant for every 3.2 advisors; the industry average was one assistant for every 4.3 reps. BIC's Top 20 Program Managers tend to have one sales assistant to every two advisors, sometimes more, sometimes less, but each program has significant sales assistant support.

Most important, the program manager fosters the culture of the group. They tend to proactively break down silos, encouraging cooperation rather than competition across divisions. This leads to more and better quality referrals and hence happier advisors. Word gets out about happy, well-run programs, and in a virtuous circle, it becomes easier to recruit new advisors. That's important, because there's a dearth of advisors in the financial services industry, and potential recruits can afford to be picky about where they work.

Program managers reading this article should take the opportunity to size up their own program against our award winners. Maybe you're close and you just need a great idea to take your program to the next level. Or perhaps your numbers would have landed you a ranking slot-if so, make sure your bank or broker-dealer nominates you next year!

For advisors, this ranking represents a list of the kind of manager every rep wants to work for-one who will create a work environment in which an advisor can maximize production while maintaining a highly ethical practice.

1
Steve Franke
Bank/TPM (if applicable): Pennsylvania State Employees Credit Union/CUSO Financial Services (CFS)
Location: Harrisburg, Pa.
No. of reps managed: 8 investment advisors
Avg. production per rep: $688,073
Total program assets 2007: $259 million
Total program assets 2006: $174 million
Years at the bank: 6
Age of program: 12 years
Product mix: variable annuities 73%, mutual funds 25%, other 2%
Total clients: 3,953
Avg. client account size: $65,600
% fee based/commission: 1%/99%
Experience of reps: 4 senior level, 4 junior level
No. of sales assistants: 4, plus an administrative assistant
% of reps who have CFPs or advanced designations: 37.5%
% of new assets from inside/outside the bank: 5%/95%