Mixing Oil And Water Six Steps To Selling Investments In Financial Institutions
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Mixing Oil and Water: Six Steps to Selling Investments in Financial Institutions
Summary:
Just like oil and water, bank products and non-bank products serve different functions but are both essential for meeting modern consumer demands and generating fee income for banks. When traditional and non-traditional financial products are expertly combined, they can lead to significant success. Here’s how banks can effectively integrate these products.
Article Body:
Oil and water notoriously don’t mix, but in the banking world, both bank and non-bank products are crucial for a successful operation. These products cater to today’s consumer demands while boosting fee income. When positioned correctly, they can deliver substantial financial gains.
Over the past 30 years, banking has transformed remarkably. Traditionally, banks depended heavily on interest income. However, regulatory changes, including the Depository Institutions Deregulation and Monetary Control Act of 1980, the Depository Institutions Act of 1982, and the repeal of the Glass-Steagall Act in 1999, have prompted banks to explore alternative financial services. In the 1990s, growing consumer awareness fueled demand, leading to significant growth in investment programs. Yet, many banks struggle to integrate investment brokerage and insurance services.
The challenge lies in the stark differences between products, delivery systems, and sales cultures. Banks may use different structures like Dual Employee models or third-party marketing arrangements, which can complicate integration. Compensation variations, one-way referrals, different risks associated with non-bank products, and compliance concerns further widen the gap between bankers, brokers, and insurance agents.
What steps can banks take to improve the integration of non-bank product sales? Here are six essential strategies:
1. Understand Non-Bank Product Sales:
Bankers often lack experience in non-bank product sales, leading to negligence in these areas. Make an effort to learn about the culture and structure of non-bank product sales units. Attend Banker-Broker conferences and educational events offered by banking trade groups to gain insights into these systems and cultures.
2. Include Non-Bank Product Sales in Bank Events:
By involving non-bank product salespeople in bank functions and meetings, you foster better interactions with bank staff. Encourage them to align with your bank’s marketing strategies. As they feel more integrated, they’ll become better ambassadors, enhancing cross-selling opportunities.
3. Manage Activities, Not Just Results:
While banks have expectations for investment and insurance units, understanding the activities behind these results is crucial. Whether you’re using dual employees or a third-party marketing firm, familiarize yourself with the processes to manage these programs effectively.
4. Set Realistic Dual Expectations:
Establish clear expectations for success that take into account statistical averages and national norms. Ensure your programs align with these expectations and monitor marketing activities like referrals. Effective systems should track and maximize referral opportunities while adhering to compliance regulations.
5. Maintain Two-Way Communication:
Non-bank sales units often receive insufficient attention. Regularly review sales and marketing activities to ensure non-bank products are effectively highlighted. Enhance communication strategies to address both sales and marketing goals.
6. Develop a Workable Business Plan:
A comprehensive business plan is crucial for success in non-bank product sales. Work with Broker/Dealer firms, third-party marketers, and insurance companies to build a plan that covers all aspects of operation, including marketing, sales, service, and training. Regularly review and update these plans to identify new opportunities and address areas needing improvement.
Although oil and water can’t be mixed, integrating non-bank financial services into a bank’s offerings is both possible and advantageous. By following these six steps, you can significantly boost your fee income and achieve successful integration.
You can find the original non-AI version of this article here: Mixing Oil And Water Six Steps To Selling Investments In Financial Institutions.
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