Wealth Biz Buzz

Since the last post on this topic, I presented some solutions on “Integration” to the New York Bankers Association.  Once again, I was thrilled with the venue – Cooperstown New York, home of our national pastime.  Coming off of a presentation at Lambeau Field, I wasn’t anticipating being invited to step into the shadows of legends so soon, but was absolutely ecstatic about the opportunity of doing so.

Inspired by my surroundings, I opened the presentation with a bit of baseball trivia.  Since the event took place on September 23, I thought I would see if anything of import happened in baseball on that date.  I was pleased to see two significant events transpired in the early years of the sport.  It seems the first official baseball team, the New York Knickerbockers was formed in 1845,

"Did not get the memo about casual Fridays"

and, in 1908, one of the most renown, interesting and controversial games in the sport took place at the Polo Grounds, in NY. I won’t go into detail here, but strongly suggest you search for Fred “Bonehead” Merkle – it’s a great story.After my talk, I was able to walk through the hallowed halls of baseball’s best and was delighted to see both of my trivia tidbits actually recounted in exhibits along with due homage to a truly inspirational and exclusive group of men and women.

Even with the compressed time afforded such presentations (for such a vast topic), I am always sensitive of the need to provide the audience with at least one new concept, thought or actionable item.

I am equally sensitive to provide the same to the followers of this blog, if not more so, since the forum is more conducive to driving into the devilish details.  So, let me hit you with one I think will provide you with an excellent starting point when trying to “harness the power and talent of your existing resources to provide a more consistent positive and compelling client experience, in order to create competitive advantage and enhanced returns for your stakeholders”.  That’s a mouthful I know, but after all, that’s the point of all this – isn’t it?  Okay, if you take nothing else away from these posts, try to keep the following six key areas of focus in mind when attempting to solve the “Integration” puzzle:

Six Key Areas of Focus

• Corporate Contribution – This is how you keep score; it’s the hits, runs and errors of our game.  We have to gauge the decisions we make in the ensuing five categories by the long-term effect on the bottom line.  We need to be relevant contributors to the net profits of the bank.

• Client Targets – It is essential to understand who we are currently serving in each one of these business lines, who we want to serve, what the market demographics are and how we will go about effectively targeting these groups.  We often muse whether the real/perceived conflict between wealth management business lines is much ado about nothing.  It seems to us, that a paradigm adjustment from a scarcity mentality to a theory of abundance would help considerably.  That is, spending more time figuring out how to capture the opportunities inside and out of our organizations than worrying about how to direct the few clients we are acquiring today.  Instead, Let’s create a good problem (i.e. too much business for the combined wealth management units to handle).  We also want to keep in mind – not all rich people are alike and, when considering the business model of most wealth management professionals, there are simply not enough rich people to go around.

• Culture  – Culture is an ugly beast, which is particularly difficult to tame.  If men are from Mars and women from Venus, then Trust professionals are from Jupiter, brokers from Saturn, Investment Advisor Representatives from Neptune, private bankers from Pluto, commercial bankers from….  If we are to solve today’s challenges, it is incumbent upon us to drop the baggage of the past and begin to become even more creative with our solutions.  No longer can we adopt the attitude of trying to tame the commissioned sales beast or bypass the Trust dinosaur.  Each group has inherent skills and value, which can be leveraged to better serve our clients and enhance returns.  In reality, at the end of the day, each of the wealth management groups are interested in serving their clients with the best advice, solutions and service.

• Core Competencies – These are the skills we must possess, both individually and organizationally to provide Mr. Goldberg and his colleagues with a consistent, positive  and compelling client experience.  Wealth management is a talent-driven business, which requires specialized knowledge and the confluence of multiple disciplines.  To win the hearts, minds and cooperation of our internal banking counterparts (particularly the commercial lenders and private bankers), we must acquire the skills needed to change their paradigm of wealth management (particularly brokerage) from mutual fund and annuity salespeople, to problems solvers and relationship managers who work with people of means.

• Corporate Structure  – Getting the batting order right and making sure you have the best players in positions of strength are other component of enhancing your effectiveness.  Reporting structures and clear delineation between distribution and manufacturing are but two of many  areas requiring attention if you are to achieve peak performance

• Compensation – How we recognize and reward our human capital is obviously a piece of this puzzle.  The disparate methods used in compensating employees (and, how we charge clients for our services) often leads to inappropriate suppositions and/or conclusions by opposing factions.  Additionally, we must quell the urge to use compensation as a means for changing behavior versus a tool for attracting and retaining the right employees.  Let’s get and keep the right people on the bus in the first place.

In future posts, we will drill into each on of these areas in detail.  Suffice it say, each is critical and should be kept in mind as decisions are made relative to changes in your wealth management business units.

Write them on the white board in your next meeting or use them as guides when planning.  That’s what my team and I would likely do if you engaged us to help you with achieving this critical initiative.

I can’t recount the number of times I meet with bankers who point their fingers at the “other guys” as the folks who need help with this, thinking they have it solved.  Perhaps you do, however, I strongly encourage you to view your progress through the eyes of Mr. Goldberg, not through the myopia often plaguing those who  too close to a situation for too long.

In any event, please share your challenges and successes with our readers (your comments are welcomed and appreciated by all), as solving this puzzle is a work in progress.  We recognize there is not a single answer and one size does not fit all, but also acknowledge we will have to use new thinking if we are to position our organizations’ to achieve the imperatives of:

• Harnessing the power and talent of existing resources
• Creating a consistently positive and compelling client experience
• Realizing competitive distinction and advantage
• Enhancing returns/rewards to all of the stakeholders

So, let’s now begin the work necessary to truly help Mr. Goldberg and his colleagues, while simultaneously helping our own cause, by using the six key areas of focus as guideposts in our quest to be the best of the best.