When Susan Lyle first moved to Fremont Bank from Washington Mutual some five years ago, one of the first things she did was get out her smoking oven and crank it up. "Everyone loves food," she says with a laugh, "so I smoked up some meat and brought it in for everyone at the branch."
It was the start of a long courtship aimed at building a team approach with the branch's mortgage bankers, commercial bankers and relationship managers.
Lyle also went to senior managers to talk about how she could help them achieve their goals. She got permission to meet one-on-one with bank staff to talk about what she does-a process that built relationships and netted her some clients as the bankers turned over their own 401(k) funds to her to manage.
Lyle's colleague at another Fremont Bank Branch, Adam Nieto joined Fremont a decade ago and faced more resistance initially. "The big problem back then was that Fremont's brokerage business had been plagued with high turnover," recalls Nieto. "Bankers don't want you screwing things up for their customers, so a key for me was building trust with the various units of the bank, and convincing them that I was not going to be leaving to go somewhere else."
Nieto says he started "on the ground floor," going to tellers in the branches. Nieto worked with them in a kind of sales training program that included a PowerPoint presentation he developed. He also offered a referral fee and ran a contest between branches to see who could come up with the most referrals, with the winning team getting treated to a dinner.
Next came approaches to the bank's business development officers and lenders. His idea was to try to get them first as clients.
"I figure if you can show what you can do for them with their own portfolios, that's the best sales pitch. If they like your work, they'll want to promote you to their clients," he says.
Nieto says it took three to four years to get the relationships up and running, but once it was established it has continued. He also went to the community bank's senior management as well as owners. "A big goal of mine," he says, "was to get them as clients too. "
He now counts Fremont's CEO and chairman among his clients. That process also took four to five years, but "getting those higher-net-worth people has meant getting referrals of more high-net-worth people," he reports.
If getting referrals from a bank's staff-the tellers, mortgage officers and commercial bankers-is the Eldorado pursued by bank-based reps, it's a quest that few seem to conquer.
Lyle suggests that one reason for this is that advisors can get too focused on growing their own books. "Sometimes, especially when you're starting out, you have to be proactive, to make the first move, and be ready to give up something to get something," she says.
She explains, "When I do an initial workup on a new client, I talk to them about their whole financial situation. Say they have a $400,000 house, with a mortgage held by another bank. I will point out the low rates and no-fee mortgages offered by Fremont Bank. And if I give a mortgage banker two or three loans that way, they start sending their people to me.
She adds, "Having the lenders making referrals is really great. When people come in to see a financial advisor, often they don't like to disclose all their assets. But when it comes to seeking a loan, they will financially 'undress' themselves in order to try and get the best rate or the highest loan possible. So the loan officer may learn about an old 401(k) that I wouldn't have discovered, and might say, 'Hey, Susan handles those. Do you want to see if she can do a better job with it for you?'"
It helps that Fremont Bank has institutionalized the idea of cross-referring among its various units and operations. Nieto says that Fremont has recently set up a system called Core Track. "That puts all of a client's information in one place that can be easily accessed by advisors, tellers and lenders," he says. "So for example, if you walk into the bank and say, 'I have $100,000 I want to deposit,' the teller will tell me, 'You should talk to this guy.' Then, after I talk with you, if I find out you own a business and have a mortgage, I will, with your permission, suggest you see a bank vice president about commercial lending, and a mortgage officer about refinancing your house." All this information is available to each unit with Core Track, he says.
Making It All Work
Both Lyle and Nieto also attribute the good relationship between the advising unit and the banking side at Fremont Bank to Fremont Senior Vice President Kim Burdick, who has promoted the idea of providing all services to bank customers "under one roof."
Nieto says that 60% of his referrals have been from the bank, with the other 40% being client referrals. In return, he says that 70% of his clients use Fremont Bank as their lender, while 50% to 60% use Fremont as their bank-a figure he says would be higher except that many of his clients, particularly legacy clients who followed him from his last bank, live out of range of any of Fremont's 18 branches.
Lyle reports that she only gets about 30% of her referrals from the bank, but adds that in terms of dollar value of her assets under management, the percentage is much higher "because of the referral of larger clients."
As an example of how the two-way relationship between advisor and banker works, Lyle cites her work with Fremont Bank mortgage officer Sean Grovier. "I give him loan referrals and he gives me advising client referrals," she says.
She tells the story of a female client who was going to refinance a home in the name of a trust. "It had to be treated as a second home, so her bank had quoted her a higher rate. She was carrying the house, hoping that her daughter would get a job and start taking over payments, but it wasn't happening. I referred her to Sean, and he was able to get Fremont to waive some of the fees so that the client wouldn't be double-charged on points....The clients were 800-rated, and already had several million dollars invested with me, and so we were able to offer a no-fee mortgage and no application fee. The were able to do a $250,000, 30-year mortgage at 3.2%, compared to the 4.25% to 4.5% the other bank wanted," she recalls.
Grovier noted, "When I'm working with a client on a mortgage strategy, I'm privy to all their assets and liabilities. Sometimes they'll already be investing with an established institution, and sometimes they don't have anyone managing their money. Either way, that's a great opportunity for me to refer them to Susan. Lucky for me, Susan has reciprocated and sends me mortgage clients too."
Nieto tells similar tales. "One client referred me to a friend," he says. "He had a commercial building with a loan coming due. I looked at the situation. There was an $8 million loan and $2 million in deposits-both business and personal assets. I brought in the lender to help with the lending side and business development for the deposits....It's important to relay the message that the financial advisors are the clients' quarterbacks. The quarterback calls the plays, so they'll be doing referrals to the lenders. You want your quarterback to be an insider."