How To Forge A Working Relationship With Bankers

Banking, just like insurance and financial services, is a relationship business. The banker can ask clients questions about insurance, wills, trusts and business arrangements. Many bankers are in the unique position to motivate this type of essential planning but usually dont have the knowledge to get it implemented.

We in the life insurance and financial services industry, however, do have this knowledge. An alliance between a bank and advisor can benefit both parties.

After all, bankers are not insurance experts. And, despite their banking experience, they often are not financial planning experts. Many bankers, finding themselves suddenly in charge of an insurance section, are overwhelmed.

They are looking for someone who is ready, willing and able to help them succeed at the business. As advisors, we are perfectly positioned to be that person.

A working relationship

Its important to understand what the bank wants and needs from a relationship with an advisor. After all, the advisor will need to sell the bank on exactly why their relationship will be beneficial to both parties.

First, in todays marketplace banks may feel as though they are losing control of assets. Given lower interest rates, consumers are investing less in certificates of deposit (CDs) and putting more money into higher-earning mutual funds and/or annuities and tax-favored vehicles.

Many bankers feel that if they could get a commission on that money as it left, and know where and how the money was invested, they would have an opportunity to win the money back at a later time. To do this, they need to be involved in the sales process.

Second, as bank margins are shrinking, more bankers are paying attention to fee income. Bankers understand the sense of not “reinventing the wheel.” Most are not eager to start their insurance operations from scratch, preferring to buy experience by buying insurance agencies or establishing joint ventures.

This is where the advisor enters the picture. Once you have established a formal relationship with a bank, you must establish a good working relationship with your bankers (including management heads, loan officers and rank and file people).

There is a misconception that if you work with a bank agency, or if you work in a bank, the bank will automatically feed you leads. And all you do is sit in the back room and write applications.

That doesnt happen. Bankers will only deal with you if they believe you are bringing something to the table that is unique in the marketplace. Bankers are looking for some trait, quality or value that will help them foster a better relationship and more business with the client.

Bankers fiercely guard their client relationships and will not bring you into the relationship mix with their client unless they believe that:

You know what you are doing;

You are not there just to make a sale;

You are there to take care of their customer the best way you know how; and

o When you are done, the customer believes the banker is a hero for bringing you to the table.

Banking on Seminars

How do you persuade bankers of these points? I found that a simple approach works best: a seminar for the bankers. Heres how we present the idea:

“Mr. Banker, before you forge a relationship with us, we want you to know how we operate. We can think of no better way than to use your employees and key people as the judge, jury and executioner.

“So we suggest a seminar for the group, as if we were doing it for clients [your customers], so that you can decide thats the quality of seminar that you and your employees can support.”

Think of it: If you could get the banker to mandate that his 10, 15 or 20 employees come and listen to you for a one-hour seminar on a topic of your choice, wouldnt that be a good deal?

If you can make a convincing presentation, not only will you turn the banker into a partner who will generate referrals, youll also turn employees who are judging the presentation into clients.

The presentation itself should not focus primarily on commission-sharing arrangements, an obvious source of fee income for the bank. If you do, youll sound no better than a term insurance buyer shopping on price.

Your talk should detail, rather, how you can help the bank nurture relations with its clients by availing them of financial planning. Through your value-added services, you become an extension of the banks relationship marketing efforts.

You also can explain how you can help create cross-selling opportunities by sharing information (the customer permitting) about the customers interest in securing, say, a refinance, original mortgage or home equity loan. Describe, too, that the bank would best be served by providing you with an office where you can meet their customers.

The benefits: You stay involved with employees, assist with asset-gathering, increase transactions, and deepen relationship and marketing efforts.

We at OConnor & Associates have found these seminars to be quite successful. Every time weve held one, weve secured the bank as a partner.

Approximately 30% of bank employees who attend these seminars ultimately become our clients. And we generate appointments with 60% of the banks customers.

You can do the same. By following my blueprint, you can make your relationships with bankers a solid and profitable one.

Timothy J. O’Connor, CLU, ChFC, is president of O’Connor & Associates, Inc., Grand Island, Neb. He can be reached at toconnor@abswebb.net. This is an abridged version of a presentation he gave at the MDRT annual meeting in Anaheim.



Reproduced from National Underwriter Edition, June 18, 2004. Copyright 2004 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.