To be a successful bank advisor, conventional wisdom says it's all about relationships.

Advisors build their books by first building relationships with tellers and loan officers, hoping to gain referrals. Then they build relationships with customers, hoping to get their investable assets to manage, and to get referrals for their friends and business associates.

But how does this work at a so-called direct bank-i.e., an Internet bank-that may not have physical branches?

Heidi Schmidt, a wealth management advisor and financial planner at USAA Federal Savings Bank, the nation's largest Internet bank, says it comes down to a very traditional skill: working the phones.

"On the phone, you have to verbally draw a much better picture of what you're trying to say when you're talking with a client," says Schmidt. "You don't have body language to tell whether what you're saying is registering or making sense to them."

The parent company, USAA, traces its origins to 1922 when a group of Army officers got together to set up a self-insurance company because car insurers viewed them as too risky. In 1983, it established the bank to provide basic banking services to Americans in the military service, but it has gradually expanded to accept veterans as well as direct family members of veterans or active-duty military.

The bank, which has grown to more than $50 billion in assets, now serves some nine million customers mostly by phone or the Internet. This year, USAA expects to have one billion "customer contacts" via the Internet, and next year, predicts Andy Collins, vice president of emerging payments at USAA, "We will hit one billion in mobile contacts alone."

USAA is available 24 hours a day (even to soldiers on the battlefield). "I can get calls from people who are out in the desert in Afghanistan on patrol," says Schmidt, who was never in the military but grew up as a "military brat," getting shuttled from post to post as her father got reassigned through his military career.

Schmidt says that financial services are an important part of USAA's mission, and it provides both brokerage services and financial advising, as well as her specialty: wealth management.

Clients with assets of $1 million or more-and with senior officers often moving out of the military into corporate executive positions, there are plenty of those-get an individual advisor like Schmidt. For those with smaller assets-the kind tallied in six figures or less-the bank has 10-person teams of advisors who field calls from around the globe. (Clients aren't assigned a single advisor, but they get the same team whenever they call.)

Another way that USAA's advisors are different from most of the industry is that they work on salary, not a percentage of their production.

Schmidt's approach with prospects, though, is one area she shares with other advisors: She starts slow with the initial call. "I work at building a relationship first," she says. "On a first call, I generally will ask a lot about them and their family. I don't bring up financial questions at all. I share a lot about my own family too. I find out what's important to them, why they made their career decisions, what they are planning to do in the future. Basically, I try to move myself from the opposite to the same side of the table."

While she is on a phone, she says she will try to develop some kind of visual image of who it is she's conversing with. "It's always interesting," she says. "You get a mental image of someone when you're dealing with them over the phone. Then when you finally meet in person, or when they send you a Christmas card or a vacation photo, it's interesting to see how good your image was. Often I'm pretty close, although I'm often surprised by a person's height," she acknowledges.

Once she feels that the client is comfortable with her, she says, "then I'll ask 'What do you want to accomplish with this relationship?'" She explains, "For example, many of them are thinking about retiring soon, so then I know I'll be putting the focus on a retirement plan."

USAA has developed a formal 13-issue program, which includes: investments, insurance, liabilities, pension/IRA, stock options, business succession, durable power of attorney, descendants/gifting to children, asset titling, executor/trustee, distribution at death of spouse/descendant questions and charitable plans. Schmidt and the other wealth managers work through these with clients and put them in some kind of order of priority.

Sometimes at this point, working on the phone can become difficult. "There are times you want to actually draw a picture, and you have to try to do that verbally," she says. Or sometimes, she'll have the client actually draw the picture. "I like to use a bucket strategy with retirement, with a certain amount of assets in each bucket. Instead of my doing it and showing it to them, I'll have them draw the buckets and I'll give them the numbers to fill in." She adds, "When you're working on the phone, you have to be a lot more detailed and analogies can be very useful."

She listens for long silences at the other end of the line, which usually means "someone is drifting." "This all takes time to get good at," she says.

An advantage of working in San Antonio, USAA's headquarters, she says, is that people worked near one another, doing the same kind of work. "You could hear other advisors working on their phones, and some people have a terrific technique you can learn from. It kind of makes it into a team approach that way."

Recently, Schmidt moved from San Antonio to Dallas, where one of the bank's 12 financial service centers is located. (There are also 31 "wealth centers.") While there is no ordinary banking done at those centers-"I can't even handle the deposit of a client's check"-they are all located near the site of major military installations, so people can come in physically to see a financial advisor. So Schmidt is working with people face-to- face now too. She says this has made her feel "a little rusty sometimes" when she gets back on the phone-something she does with her old clients, most of whom have stayed with her.

She notices that working in person takes more time. "There's more relationship-building, and there are deeper subjects you get into working face- to-face, but in the end it means a longer day." For example, a woman recently came in for a consultation. The woman sat down and discussed her finances and then, at one point, pulled out a folder she had brought with her. "She started talking about her mother's financial situation, and asked what I could do for her. We got into a discussion about her mother's health and her financial needs. It took an extra 30 minutes to take care of all that." She says, "That's the kind of thing that just would not happen on the phone."

Still, Schmidt likes the face-to-face advising process better. "I enjoy meeting people," she explains. "With the telephone there is a small piece missing."

That said, direct banking seems to be a growing trend. Deposits at direct banks have doubled over the past five years-a growth rate that is three times as fast as the banking industry in general. Some 12% of Americans report that they have a relationship with a direct bank, although less than 5% say it's their primary banking relationship.

Some of those banks are only deposit institutions at this point, but the trend is toward becoming full service banks with online service and phone service only - no branches.

Inevitably, more of those banks will offer financial advisor services too. So it will pay for advisors in the bank channel to work on their telephone skills now for the future demands in the job market.