How can advisors take advantage of opportunities created by limitations on fees and transactions? Program managers at BISA’s bank broker-dealer breakout session presented some interesting answers.

“Banks are struggling with where to get more revenues because of fee reductions,” said Rob Comfort, head of Huntington Investments. “This gives us an opportunity to play a prominent role.”

Michael Millard, head of wealth services at Citizens said that his program put a lot of effort into measuring “Qualified Kept Appointments,” and showing that each one is worth $672 of revenue. “We ingrained in the minds of top management how much money each QKA is worth,” he said. “They’re very widget conscious this is getting it down to terms they understand and that has helped a lot. Now that’s one of the highest things on their score card. If they hit their goal there, its a 20% accelerated for all of their goals.”

He added that customer satisfaction is much higher for people who sat down with advisors than for those who didn’t according to surveys conducted by consultants Novantas and McKinsey.

Another attendee said she requires all her advisors have two closed new checking accounts per month and that affects their payout. This made a huge impression on the head of retail. “That’s the kind of stuff that can be very powerful. when we as a broker- dealer can do things beyond our day to day stuff,” she said.

Mike Mortensen said talking about customer stickiness has been key at PNC Investments. “Without the investment relationship, 95% of customers were retained but with an investment relationship, 99% were retained and that difference is worth a fortune,” he said. PNC also monetized what clients have in investible assets outside the bank using IXI numbers and found that every 1% of that money the bank can keep is worth $50 million in revenue.

PNC also surveyed bank customers and found that 60% of them would be interested in talking with bank advisors about investments. The problem is that they’re not aware the bank offers these services. “We haven’t presented a consistent enough value proposition,” he said. “But if you can put all that together, the dollars are huge.”

Another attendee from SunTrust said they measured deposits and profitability of investment clients compared with non-investment clients and found that investment clients had twice the deposits with the bank. They made sure that this wasn’t just because brokerage clients were wealthier, but to compare equally wealthy clients with and without brokerage accounts.

“If you’re trying to grow deposits, let’s grow investment clients,” he has argued with management. “You get twice the deposits and four times the profitability on the bank side.” In addition SunTrust looked at what was happening to funds as CDs matured and found that most of the money was going out the door to external brokerage companies. They could then make the argument to the bank that the enemy wasn’t internal brokerage but external brokerage.  

The key is to talk about  things that are  important to the bank, he said. “We never talk about fee income, we talk exclusively about how brokerage helps retain licensed bankers and increase deposits.” For example, he said that there is a 14 month difference in retention of bankers if you license them.