Seven Keys to Success for Financial Advisors in Credit Union Investment and Insurance Sales Programs Mark E. Hoaglin March 7, 2009 Credit Unions have an extraordinary opportunity to take advantage of consumer dissatisfaction with the current banking system and generate additional revenue. One of the best ways to take advantage of this new opportunity is to mine the “acres of diamonds” they have in their own backyards – their investment and insurance sales program. Hiring the right financial advisors to serve the credit union members is a critical step in building a successful program. Make the wrong hire and it will set a program back months. Once the right team is on board there are some “non-negotiables” when it comes to succeeding in a credit union environment This whitepaper examines seven of the key factors that will determine whether or not a financial advisor will thrive when it comes to partnering with the credit union team and providing world class service to the members.
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Seven Keys to Success for Financial Advisors in
Credit Union Investment and Insurance Sales
Programs
Mark E. Hoaglin
March 7, 2009
Credit Unions have an extraordinary opportunity to take advantage of consumer dissatisfaction with the current banking system and generate additional revenue. One of the best ways to take advantage of this new opportunity is to mine the “acres of diamonds” they have in their own backyards – their investment and insurance sales program. Hiring the right financial advisors to serve the credit union members is a critical step in building a successful program. Make the wrong hire and it will set a program back months. Once the right team is on board there are some “non-negotiables” when it comes to succeeding in a credit union environment This whitepaper examines seven of the key factors that will determine whether or not a financial advisor will thrive when it comes to partnering with the credit union team and providing world class service to the members.
Seven Keys to Success for Financial Advisors in Credit Union Investment and Insurance Sales Programs Page 2
Table of Contents
Introduction 3
Key # 1 - Have a pleasant personality – be easy to get along with 4
Key # 2 - Get the Branch Manager to be Your Advocate 7
Key #3 - Get the Branch Team to be Your Biggest Fans 9
Key #4 - Be a Top Salesperson 11
Key #5 - Recognize and be Recognizable 13
Key #6 - Become a Financial Planner vs. Product Peddler 15
Key #7- Become a “Marketeer” 18
Conclusion 21
About the Author 22
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Introduction
You know how to sell investment and insurance products and services so working in a credit union
should be a snap, right? It’s no different than working in the wirehouse, right? If you answered “yes”
then you are wrong on both counts. The hallway of my office building is littered with the ghosts of
financial advisors that I hired early in my management career and who have since departed after a brief
stay in some of the branch offices for which I was responsible. Yes, I too was lured into the logic that if a
financial advisor had a track record of success somewhere else then they would automatically be
successful in my credit union branches.
The short answer is an emphatic, “No way”. Success at another financial institution does not
automatically transfer to success in the credit union environment. In this whitepaper we will explore
some of the key reasons why that equation doesn’t add up. To be successful in a credit union, financial
advisors must “get over themselves” and become total team players. I will cover this in more detail later
but if you are reading this and you can’t get beyond that concept then stop reading this now and go find
a position as an independent advisor or at a wirehouse. Credit unions are all about member service. In
order to provide that best in class service it takes a team effort and many times it is the financial advisor
who is called upon to help lead the team.
You will hear this again but a little gem that I always tell my new hires is this, “Check your cool card at
the door” when you work in a credit union. By the time you finish reading this whitepaper you will know
exactly what I mean by that statement. If you are a financial advisor reading this, I wish you well. A
credit union can be a rewarding environment in which to build a practice both financially and personally.
Take these seven keys to heart and you can’t help but succeed. If you are a credit union manager and if
you remember these seven keys when you are hiring a prospective financial advisor to serve your
members then you won’t go wrong by adding these keys to your checklist of “must haves”.
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Key #1 – Have a pleasant personality – be easy to get
along with.
OK, sounds like a no-brainer, right? Yet I have seen this one overlooked time and again only to find that
guy who seemed so chipper during the interview turned out to be Attila the Hun in the branch. Like you,
I learned my lesson through a number of hiring mistakes. While this is not a treatise on hiring practices
there are a number of things you can do to minimize those mistakes. I cover those in my whitepaper,
“Seven Reasons Investment and Insurance Programs Don’t Succeed in a Credit Union and How You Can
Avoid Them”. For purposes of this paper heed the advice to make sure your advisors have a pleasant
personality at least when they are at work.
When I was managing the program for a large regional bank I had an advisor in one of my branches who
had been with the bank for about 10 years and was an above average producer. He had the personality
of a snow man but he was one of those people whom clients either liked working with or avoided at all
costs. He was not particularly friendly and rarely smiled. He knew the business and was actually a solid
financial advisor. He was marginally polite to the branch staff. In addition, he was covering three very
different branch offices in our territory. I finally figured out that he achieved much better results in one
branch compared to the other two.
After getting to know this advisor I discovered the reason why. The branch where he had better results
had a similar demographic makeup to his own background and he felt much more comfortable there. He
felt intimidated in the other branches which had a higher net worth type of demographic. I never
thought I would have to be part psychologist in my role as sales manager but I decided to move this
advisor permanently to the branch where he achieved better sales results and he thrived there for many
years turning into one of my best producers.
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I tell that story for two reasons. One is to emphasize how important it is to make sure there is a good
personality fit between the financial advisor and the branch (es) that he/she will be serving. The second
reason is to show how much of an impact from a sales perspective the right fit can either help or hurt
sales production.
One of the biggest adjustments financial advisors have to make when they come from a wirehouse or
independent office is the realization that they don’t get to choose their clients and prospects like they
used to. They are serving the membership of the credit union, which is a good thing. However, along
with that benefit comes the challenge of dealing with and serving different types of people, many they
may not have sought out under different circumstances. Again, a successful financial advisor in a credit
union has the ability to be a chameleon; to serve the curmudgeonly senior with $50,000 in a CD with a
smile on her face just as she would with the friendly young entrepreneur with $500,000 in a money
market account.
Let it Shine! – Be Yourself but Check Your Cool Card at the Door
The hip young financial advisor cruises into the credit union parking lot driving his new BMW and parks
in the prime parking space in front of the branch. He hops out of the car dressed in his Armani suit
whistling and looking good in his Oakley sun glasses. He walks up to the branch door and taps on the
glass with his car keys. The teller who was counting her cash drawer glances toward the door and when
she realizes who it is rolls her eyes and walks over to the door to let the financial advisor in. Still
whistling he nods to show his gratitude and proceeds straight to his desk in the corner of the branch
without a word to anyone, picks up the Wall Street Journal and becomes lost in a different world. Once
the branch opens for business he makes a few phone calls and silently wonders why he is still working
the same book of clients from his days at Merrill Lynch. “I thought I would get a bunch of referrals once I
came to the credit union,” he wonders to himself.
Does this scenario sound farfetched? Well, it shouldn’t. A financial advisor should be him/herself but
check the “cool card” at the door. A $10.00 an hour teller doesn’t want to be reminded of the
compensation difference between her and the financial advisor who drives up in an expensive new car
and barely acknowledges her and then expects her too refer members to him. It’s human nature. Does it
mean that the financial advisor should park his new car around the corner? Well, I have known some
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who were sensitive to the scenario I just described and did just that. But here’s where they were
different.
Get to Know the Branch Team
The successful financial advisor gets to know his team members. She is having lunch with them
collectively and one-on-one from time to time. He is meeting with them individually to discuss their
401(k) as a way to introduce them to his world so they know what he can do for the members they refer
to him. Every day she makes a point of walking around the branch checking in to see if there is anything
she can do to help them reach their branch goals because she has taken the time to understand how
they are compensated so she is always looking out for referral opportunities back to the team be it a
mortgage loan or car loan or a checking account. She also will ask them how their day is going or how
their weekend was. Once in a while she will spring for pizza at the end of an especially trying day. This
daily walk has resulted in more business than she can remember.
When a financial advisor adopts the persona described above, the branch team won’t think twice about
the car you drive because you are one of the team. You can be cool by being part of a successful team.
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The best in class financial advisor in a credit union understands that the Branch Manager is the yin and
the yang when it comes to the success of the branch. If the Branch Manager is having a good day then it
will be a good day in the branch. Unfortunately the converse to that statement is also true. That’s where
a good financial advisor will be worth their weight in gold to the branch team. The successful advisor is
“joined at the hip” with the branch manager. They are each other’s advocate. The best practices for this
team include a weekly one-to-one meeting that they stick to religiously.
The Weekly One-to-One
This is a time devoted to enhancing the relationship between the Branch Manager, the branch team and
the financial advisor. Among the agenda items should be reviewing the status of referrals generated
during the previous week. The branch team should have an established goal so during the one-to-one
progress toward the goal should be discussed as well as the quality of referrals and any cross-sell
opportunities. In addition, the overall branch goals should be reviewed and the financial advisor should
review ideas regarding how he/she can help the branch achieve the goals. Again, the financial advisor
should have a good understanding of the branch compensation plan so he can understand how he can
contribute to the team and individual goals. In addition the financial advisor should have a production
goal so this is an opportunity to check in with each other on what can be done to help the advisor and
celebrate successes achieved.
There should be an agreed upon agenda for the meeting with each party bringing issues and ideas up
before the meeting
Write Clean Business
This is another best practice that is often greeted with, “Duh.” Remember this is a sales position and
different type of pressure can come to bear on how a financial advisor conducts their practice. Financial
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What type of trusted financial advisor should you be? There is a lot of discussion in our industry
around this topic. Russ Allan Prince an expert on the private wealth industry, president of the market
research and consulting firm, Prince & Associates, has conducted a considerable amount of research
on this topic. Among other things he found that most people want their broker to be a “wealth
advisor”.
One of his studies found that investors will give more of their assets and will refer four times more
people to the advisor who takes a more holistic approach to his/her practice versus the “product
peddler” who takes a more narrow view of a client’s financial picture. The advisor who asks about the
client’s hopes and dreams for the future and develops a strong working relationship with that client will
reap the rewards on a number of fronts. The Prince survey showed that once you make this holistic
connection with your member/clients and prospective member/clients you will discover member assets
that you did not know existed. As a result, your member becomes more successful in their financial life,
you reap the financial and psychic rewards and the credit union retains a happy member who brings in
additional assets, takes advantage of other credit union products and services and refers friends and
acquaintances to you and the credit union. Sound farfetched? Read the quote above again.
Let’s look more closely at the Prince survey. 4,106 brokers participated in the survey. The brokers fell
into three distinct styles of managing their practice:
Wealth Manager – comprehensive holistic approach to managing their clients’ financial lives including
the assets as well as the liabilities of their clients; a planning orientation to solving financial problems.
Product Specialist – in this model the broker focuses on a product niche i.e. managed accounts, fixed
income, etc.
Investment Generalist – brokers provide a wide range of products to solve client financial problems.
They do not use a comprehensive financial planning approach.
65.5% of the brokers surveyed fell into the investment generalist category. The next largest segment is
the product specialist, 22%. The smallest group was the wealth manager (12.3%).
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The survey found that the brokers who took a more holistic approach to their business enjoyed the
greatest increase in year over year revenue for their financial planning practice. Why? The “wealth
manager” takes a comprehensive planning approach to their financial proactive and creates integrated,
customized solutions for their clients. They leverage client relationships, cross-selling and providing
products and services not tied to the markets. The more products and services you can offer, the less
affected you will be when there is a market downturn because you will have an array of products to
offer such as insurance or estate planning. In addition, the deeper your relationship with your clients,
the more opportunities will develop to help those clients.
By comparison, the investment generalist and the product specialist typically do not fare as well as the
wealth manager year in and year out. Typically a product they specialize in will fall out of favor due to
market or regulatory conditions and their production revenue falls accordingly. In addition, they have
not deepened their client relationships so consequently they do not uncover the opportunities to help
their clients in other ways as does the wealth manager.
How do we become a wealth manager? Certainly having the resources necessary to help your clients is
critical whether it is financial planning software, estate planning resources, or a CFP designation (or
other education opportunities); it takes a commitment to expand your comfort zone and your practice.
It also takes a commitment to get to know your clients. Are you asking the right questions? When was
the last time you asked your clients or prospective clients the following questions?
1. If you could relive one vacation, which one would it be? Why?
2. Who influenced you most about your views on money?
3. What are three checks you would like to write in retirement?
4. On a scale of 0 to 10 how much confidence do you have in your investment plan?
5. What’s going on in your life right now that could impact your financial future?
Our members typically will not volunteer the answers to these questions unless we become a trusted financial advisor and deepen our relationships by asking the right questions and getting the answers that will allow us to solve our members’ financial problems. Only then will we become true “wealth managers” to our member clients.
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Key #7 Become a
“Marketeer”
"A brand for a company is like a reputation for a person. You earn reputation by trying to do hard
things well."
---Jeff Bezos, Founder of Amazon.com
When I coach financial advisors I always ask the question, what business are you in? As you can imagine
the answers I get are varied but usually revolve around the notion of helping people with their money,
etc. As my friend, Rob Shore, President of Shorespeak points out in his presentation on Memorability
Quotient; there is a sea of sameness in the financial services industry. With the growing popularity of
financial advisors getting the Certified Financial Planner (CFP) designation how does a consumer decide
where to go to get solutions to their financial problems? As I have pointed out many times before, we
don't have to compete, we have to create and differentiate. We have to develop a personal brand.
Starbucks is a good example. They have differentiated themselves by creating an "experience" when you
go there. In their corporate culture they don't just sell coffee. That's their brand. That's why they can
take a product that costs about two cents to produce and sell it for $3.00 +. The premium is the branded
experience that is unique to Starbucks and lots of people are willing to pay for it. Charles Revson, the
founder of Revlon, understood this distinction. He said "In the factory we manufacture cosmetics; in
the store we sell hope."
The same can happen with your business. For example, if you are a financial advisor what do you sell?
What is your brand? People can buy the commodities i.e. stocks, bonds, mutual funds and annuities
over the telephone or on-line. What they are buying, of course, is you. They come to you because of
your specialized knowledge, reputation for service, etc. We have already established that Starbucks