Bank Investment Programs

Investment programs continue to provide tremendous value to the financial institution (bank or credit union). Studies have shown that households that own investments through their primary bank or credit union are among the most profitable for the institution. According to Kehrer Bielan, those households have 38% greater checking account balances and 40% greater savings deposits than households that own investments elsewhere. They are also much more likely to use additional products and services from the financial institution, including mortgages, vehicle loans, and credit cards. What’s more, households are 27% more likely to stay with their bank or credit union that holds their investments.

Despite these promising statistics, successfully managing and growing an institutional investment program remains an enormous challenge. As branch traffic continues to wane, so do the referrals. Maintaining a strong relationship between the financial institution and the investment program requires significant effort. Finding and keeping top advisor talent is a never-ending task. This article highlights key ways program managers and leadership can manage and grow their firm’s investment program effectively.

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How to Effectively Manage and Grow Your Investment Program

1. Promote an Environment of Cross-Referral Opportunities

Typically when we talk about referrals, it’s about referrals coming from the bank or credit union to the investment program. Consider the benefit of referring clients back to the institution. It needs to be a two-way street. Your advisors should be on the lookout for other opportunities such as loans and insurance referrals.

Another essential aspect of cross-referrals is the importance of keeping a healthy relationship between branch employees and your team of advisors. When an advisor fails to follow up on a referral from a branch employee, it may cause the referrer to feel as though it reflects poorly on them. Additionally, coach your advisors to thank the branch employee for making the referral.

2. Focus on Open Communication

Open communication within your investment program and with the financial institution will help build trust and confidence. Trust and confidence is key to ensuring engaged employees. All this leads to improved productivity and satisfied customers. Yet, clear communication is an area in which the financial services industry lags behind. A Workplace Trends survey of more than 800 financial services employees found that 49% of participants felt the financial services industry could become more transparent by encouraging straight communication.

One of the best ways to foster a culture of open communication is to lead by example. Encourage open dialogue and sharing of ideas. When appropriate, involve staff in decision-making processes and communicate honestly and regularly with your team.

3. Leveraging Financial Technology Solutions

A recent study from Fidelity found that 48% of firms outsourced IT/technology; those that do outsource report more growth in both the number of clients and assets under management. Financial services technology solutions will bring efficiency and accuracy through automation. According to Gartner, manual compensation processes are subject to error rates between 3-8% of total incentive payouts. Automating manual processes will help ensure your advisors are paid accurately and on time. Less time will be spent on resolving commission disputes and putting out fires freeing you to focus on strategy, forecasting, and leading your advisor team. Learn more about Terrapin’s data aggregation and process automation solutions here.

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