Talent development is finally getting its day in the sun within banks’ wealth management departments, a development that many industry experts believe is long overdue.
“Banks are looking to grow their wealth management business, but they’re playing catch up,” said Scott Welch, senior managing director for Fortigent, the Rockville, Md.-based wealth management outsource provider. “There had been a mismatch between the business objectives of wealth management and the culture of banks. But we’re seeing a change in how they’re working with talent, paying them and supporting them. In the past, I think banks just thought it was enough to change somebody’s title. But now they realize they have to change the way people actually do their job.”
In fact, the increased emphasis on talent development is being driven by banks’ recognition that profitability and retention are directly tied to relationships, said Maria Taylor, a talent development coach and managing director of Penn State Executive Programs at the Smeal College of Business at Pennsylvania State University.
Banks have also become concerned by a recent survey from the American Bankers Association and the Corporate Executive Board showing that 25 percent of bank wealth management employees with high potential plan to leave their positions, while 65 percent of disengaged workers plan to stay. What’s more, the survey showed that over 50 percent of bank wealth management departments reported weak training programs, succession planning initiatives and talent pipelines.
“Banks need to be more patient with talent,” said Jim Marion, managing director for U.S. Trust, Bank of America Private Wealth Management. “You can’t just plug people into a job, you have to nurture then. Talent development is a cost of doing business and an investment in human capital that has to be done. At U.S. Trust we’ve begun to bring training to younger employees at a more introductory level and are spending more time with our new folks.”
Wealth managers need to focus client development efforts on the banks’ strategy, values, brand and goals, according to Taylor, who spoke at the American Bankers Association’s annual Wealth Management and Trust Conference in Miami Beach earlier this week.
High-Potential Employees Key
Identifying and developing high-potential leaders was particularly critical for banks, she said. Indeed, over 75 percent of bank executives believe that a high-potential employee is more than 50 percent to 100 percent more valuable than an average employee, according to the ABA/Corporate Executive Board survey.
High-potential employees can be identified by being able to deliver results, having high learning capability, displaying an enterprising spirit and being a good collaborator, role model and teacher, Taylor said. Once identified, those employees should be given written development plans, she added.
Banks should use networks and knowledge sharing to further talent development, Taylor advised wealth managers. She recommended using business management strategies such as Six Sigma, tactics including after action reviews communities of practice and team collaboration tools as well as social media such as blogs, Wiki’s LinkedIn, Facebok and Twitter.
One talent development tactic that worked well at Rockland Trust Company of Hanover, Mass. has been intra-divisional feedback, said Douglas Butler, director of research for the bank. “We’ve had a lot of success with from intra-divisional feedback from all parties,” Butler said. “Sales is giving feedback to portfolio management, relationship managers to sales, across the board. It’s been helpful to get those perspectives from other points of view and it has allowed us to get better.”
Talent development is especially important as banks face increased competiton from RIAs, independent broker-dealers and wirehouses, said Douglas Bolles, executive vice president of Southside Wealth management of Tyler, Texas. “It’s critically important that we look at best business models,” Bolles said. “The RIA model, for example is attractive to clients and has a lot of strengths. When it comes to talent, we need to attract people with the skill sets to put in place what clients are looking for. Otherwise what we’re doing is fiction.”