Bank Advisors In A Good Position To Build Long-Term Relationships

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Financial service companies spend millions of advertising and marketing dollars each year to attract new customers. Winning a customer, however, is the easy part. In the increasingly competitive financial services arena, keeping that customer is the challenge.

The ability to sustain a strong client relationship is predicated on three basic characteristics to the relationship: continued growth, valueand mutual trust. Any one of these characteristics can start a relationship, but it takes a commitment to all three to build and sustain a long-term one.

Growing the client relationship means staying ahead of the client’s needs, not just keeping up with them. Today’s banking customers are better informed, better educated and more sophisticated than customers in the past. Regardless of whether the relationship is built on providing traditional banking products and services or investment and insurance products, customers are not just looking simply to complete financial transactions. They are looking for an interactive relationship with their financial advisor to help them achieve their lifetime goals.

They expect their advisors to make recommendations that will move them more quickly to financial security, including full financial and estate planning advice. They expect you, the advisor, to live up to the promise of being a one-stop shop.

As financial organizations respond to these growing expectations, the lines between banks, brokerage firms, mutual funds and insurance companies have blurred. Large banking entities are setting their sights on being perceived as a premier national financial service organization.

Banks with an insurance offering have an advantage in establishing long-term client relationships, because insurance, by its very nature, is a long-term planning vehicle designed to accumulate and protect wealth.

Providing continuing value means striving to do what’s best for the customer. Understanding clients clearly and making certain they are offered the most appropriate and effective financial solutions available is key.

This hinges on listening to the customer, understanding exactly what their current position is financially–from both an investment and a planning perspective–and knowing what long-term financial goals they wish to accomplish.

Establishing trust is an area where banks have a competitive advantage in an increasingly crowded financial marketplace.

Banks have the ability to bring to the table an entire team of financial experts (financial advisors, trust, investment and insurance specialists, and so on). Insurance companies, on the other hand, have mainly their insurance products to offer clients, and insurance may not always be the best solution to a customers needs–another financial product may.

The use of in-house insurance specialists in collaboration with in-house brokers and financial specialists helps banks leverage their relationships with carriers objectively. They have the ability to offer the right tool for the job using a best-of-breed product set that is tied to their clients needs.

Because a customer is a customer of the entire bank, its critical to be objective and offer clients a choice of products. Otherwise, if you provide them the wrong solution, you can lose the entire relationship–not just the sale of one product.

The 2001 American Banker/Gallup Consumer Survey found for the third consecutive year that banks’ ability to inspire customer trust and confidence outran that of such competitors as finance companies, mortgage lenders, brokerage firms and insurance companies. In this year’s survey, for the first time since the survey was started in 1995, banks even outranked credit unions on the subject of trust.

An advisory partnership with clients requires an exceptional level of personal service and on-going face-to-face communication. The advisor that initially meets with the client should also serve as the relationship manager for the account, except when the client can be better served through the fiduciary expertise of others. Yet even when a fiduciary relationship is established, the advisor remains available for consultation and retains an economic interest in the continued satisfaction of the client.

Heres an example of how this can help build a long-term relationship. A financial advisor invited his teammate, an advanced insurance specialist, to one of his meetings to introduce him to his client. The client, a retiree, had several annuities from which she did not need the income. Both the financial advisor and the advanced insurance specialist were able to show the client how she could use her annuity income to purchase a life insurance contract that would ultimately benefit her family. The client was pleased with the wealth transfer strategy and signed the contract.

This resulted not only in producing initial revenue but also in keeping the invested dollars with the bank rather than being lost to estate taxes or another financial institution. More importantly, it earned the two banking professionals the confidence and trust of the client and her family and opened doors for future investing opportunities.

It’s been said, “You get what you give.” That’s still true today in any industry. If you want a long-term commitment from your client, you must be willing, ready and able to extend that same commitment to your client.

is president of Wachovia Insurance Group, a subsidiary of Wachovia Corp., Charlotte, N.C. He can be contacted via email at david.degorter@firstunion.com.


Reproduced from National Underwriter Life & Health/Financial Services Edition, February 18, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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