The biggest banks are having some success in certain points of succession planning. And even a few small banks, with one big caveat, are seeing some progress.

Indeed, this is an issue the channel is beginning to encounter, says Frank Drago, executive vice president of Citizens Bank and president of Citizens Securities. The often-cited problems of an aging work faces are magnified by the fact that those advisors in their late 40 and early 50s are being heavily recruited by the wirehouses, he says.

The channel as a whole has not done a great job in bringing along young advisors, he says. But there are pockets of progress. Eventually, he thinks the top 15 banks will begin to look like the wirehouses in this respect, although it's likely to develop slowly with banks picking and choosing various best practices. The smaller banks, he says, will have a tougher time keeping up in this regard.

For his part, he views Citizens as a place where advisors should want to work their entire career, which means he wants to "be in front" of the succession issue.

To that end, one benefit Citizens offers its advisors as a way remains competitive with wirehouses is a deferred compensation plan, Drago says, starting at the $400,000 level of production. It also offers upfront transition payments, essentially a forgivable loan.

He says banks need to shore up their weak areas, like the lack of succession planning, in order to capitalize on their value proposition, which he sees as the flow of referrals.


Corning Credit Union, in upstate New York, is one of the smaller institutions that established a succession plan for one of its advisors. (It has about $1 billion in assets.) Mike Quattrini retired after 40 years there, the last 20 of them as an advisor in the program that he helped launch.

Bank Investment Consultant wrote about Quattrini last year as he was beginning to enjoy more time on the golf course and behind the wheel of his sports car. More recently, we revisited the program manager, Nick LaPuma, to see how the plan was working out back at the credit union.

LaPuma says the plan, which took two years to complete, originated simply over a series of meetings between him and Quattrini. First, they divided his book of business among a younger staff of advisors based on personality match with the clients. Then they had the younger advisors sit in on client meetings just to observe. But they tweaked the plan along the way, sometimes in subtle ways. For instance, at first the young advisors just sat and observed. But that felt awkward, LaPuma says, like they were disengaged. So they decided to have them take notes.  It was a small change, but made for a more vibrant meeting for everyone.

After a few such client meetings, the subsequent meetings would occur in the younger advisor's office with them talking the lead and Quattrici in the observer role.

"The clients really took their ques from Mike and after a couple meetings, they mostly took to their new advisors very well," LaPuma says.

The credit union has reaped the rewards. The vast majority of clients were pleased with their new advisors, he says. (He shared written reviews of many clients, anonomously, and they were all rave reviews.) Quattrini told Bank Investment Consultant last year that only about 1% of the clients asked to change to a different advisor from the one selected for them.

LaPuma says this model would be replicable, but only for programs that pay on salary instead of from a grid.  "We pay advisors on salary so this was easier.  We could focus on the best personality fit. If there were commissions involved, there would be the touchy matter of who gets what."

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