Banks experiment with advisory recipes
While banks have had a chequered history in the advisory industry over recent years they are getting closer to finding the right formula. Ann Cunninghame explains what they are up to.
Tuesday, September 7th 1999, 12:00AM
Banks have a prime advantage through their ready-made client base. They're less likely to have hassles finding staff as they can appeal to a more junior level, offer on-the-job training and can promote people from other parts of the bank. They're also more likely to provide a base salary plus incentives that can offer a comfort zone for newcomers.
On the flipside, there can be the constraints of having to work within the bank framework and sometimes competing with branch staff and other teams, product sales requirements and their perceived lack of independent advice.
Banks have tried different recipes to approach its higher value clients. Westpac's shortlived Personal Investment Centres was one effort, the National Bank went down the private banker route and Bank of New Zealand has developed several tiers of private banking and advisory service.
Meanwhile, the ASB Bank has built up a team of 17 investment advisers over the last couple of years to complement its 100-odd 'trained personal bankers' who deal with business up to $100,000. Chief Manager Investment Services Roger Perry says they're not looking to increase the team in the immediate future, "just build up through organic growth".
When they first kicked off, most advisers came from outside the bank but it's now more of a mix. He claims they don't have many problems finding staff.
"When we recruited just recently, about 30 CVs came through from just about every organisation and financial institution. There isn't a shortage of people at a certain level; it's whether they're the right sort of people or fit in with the culture."
They're not necessarily looking for financial planning qualifications from day one either, although one qualified CFP has signed on in recent months. What the bank does do is send them off on an Adviserlink or IPAC course, provide in-house training and encourage advisers to work towards the diploma and CFP status.
The obvious risk is that those people then light out on their own.
"You're always going to get migration with any organisation that does well in training," Perry says. "However, because of our structure, we tend to keep most of our staff."
He says the bank offers an open-ended package with a base salary plus incentive, "so if you do well the end remuneration is very attractive: the scope is there."
Over at the ANZ Banking Group, National Manager for ANZ Premier Financial Services Mark Stubbings spells it out. The bank offers a base of around $60,000 and an open-ended bonus (best amount is $40,000 to $50,000) which he believes is one of the better deals.
ANZ has 100 advisers, with about half of these specialising in investment advice and the rest in what he terms wider financial advice. Stubbings says they're not expanding the team at the moment but will replace those who've retired.
He says that a quarter of the advisers were external recruits and, of those, about half came from other banks and financial institutions and the rest from the independent market. In recent times, he says only one person has left to join an independent firm.
"We're essentially looking for experienced people, either qualified or partly qualified, graduates with a diploma in financial planning or a good business or commerce degree."
"Obviously the banks have a very attractive clientele and that's a very good start. It certainly helps with the most difficult aspect (of the job), which is prospecting.
"We also provide extensive software and hardware, and obviously we mitigate the compliance issues."
Stubbings says that he gets a lot of responses whenever he advertises for staff.
"That's good on the face of it. But the reality is that there are a number of organisations hunting for people with exactly the same qualifications.
" The reasons we don't always attract the right people are the sales aspect (when the word sales is mentioned, it often acts as a turnoff), the emphasis on qualifications as a lot of people won't take the steps needed, and general lack of experience in the industry."
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