Learn From the Masters!

An Interview with Lorin McMurray, EVP and Program Manager of Guaranty Associates, Recipient of the 2005 Award of Excellence (Regional Bank Program) at the Bank Insurance and Securities Association’s 2006 National Conference.

LicensedBanker.com:  Tell us about your parent bank’s size and geography.
Lorin McMurray:  Guaranty operates 150 branches in Texas and California.  Assets are around $17 Billion, and deposits around $9 Billion.  Our average branch size is around $65 million in deposits.

LB:  You have a somewhat unique organizational structure in your investment program.  Tell us more about it.
LM:  We made a decision 17 years ago to run our program using only licensed bank employees, and today we have of team of over 300 Licensed Personal Bankers who are really doing a fantastic job both for us and for our customers.  Of the 320 PBs, about 200 have both Series 6/63 and insurance licenses, and the rest are insurance-licensed only.  As these insurance-only PBs demonstrate their abilities, they are encouraged to “graduate” to the next level of license.

LB:  Why don’t you use dedicated Financial Consultants in addition to your PBs?  That seems to be the model in most bank programs.
LM:  Our goal as a business is to a “low cost, low risk provider of financial products and services” to our customers.  We feel that our PBs are well equipped and trained to offer a menu of quality investment and insurance products, perhaps a somewhat smaller menu than at “dedicated” programs, but a menu that meets the needs of almost all of our customers very well.  In addition, the PB distribution model results in a substantially higher profit margin for our company, due to the efficiencies of “multi-tasking” bank employees.  Finally, I subscribe to the saying that “to catch more fish, you need to put more lines in the water”, and our PB model offers the efficiency of scale that allows us to effectively provide great coverage for all of our branches. Read the entire interview.

What is a Licensed Banker?

One of the fastest growing professions in the banking industry is a relatively new position-the Licensed Banker. The role of the Licensed Banker is to be able to provide bank customers with a complete range of products and services to meet their financial needs, from checking accounts to mortgages to mutual funds, annuities and life insurance. Depending upon the banking institution, a Licensed Banker will obtain and utilize a state insurance license, NASD licenses, or both. Licensed Bankers are able to work with all of the bank branch’s customers, and never lack for prospective business!

Start Your Career as a Licensed Banker

• There is a very high demand for Licensed Bankers by banks of all sizes in all locations
• Earn a great income while helping customers meet their financial goals
• Virtually unlimited supply of potential customers who need banking and investment services and products
• Excellent career path opportunities
• Banks vary in candidate qualifications. Click on LicensedBanker.com’s Careers and Company Profiles sections for details on banks in your area, including job requirements and contacts for your next steps.
• Get started on your new career today!

Sales Quality Group has been conducting mystery shopping studies of broker-only, licensed branch employee and hybrid investment sales programs since 1994.  Sales Quality Group's research illuminates both the strengths and weaknesses of selling investment and insurance products through licensed platform bankers.

Sales Quality Group's shoppers, posing as investment prospects, check for three kinds of compliance behaviors – the disclosure of investment risk, product knowledge, and the suitability of the investment recommendation.  In 33 mystery shopping studies of brokers and licensed bankers conducted since 1999, the licensed branch employees did not perform as well as the full-time brokers, but the performance gap was relatively small.  Where the bankers came up quite short was in needs assessment – profiling the customer for prior investment experience, investment objectives, other liquid assets, etc. – the building blocks of a suitable investment recommendation.
Read the entire article.

Management and Supervision Strategies for Bank Platform Investment Programs

By Bruce Stava
President:  LicensedBanker.com

With the explosive growth in the past few years of platform investment programs, banks and their broker/dealer subsidiaries have grappled with various strategies for sales management and supervision of the of the investment activities of licensed bank employees.  Platform programs fall under 2 general categories: insurance-licensed bankers who are able to sell fixed annuities and some life insurance products, and insurance- and-NASD-licensed bankers who can also sell variable life products and mutual funds.  The technical aspect of supervising these reps differs due to NASD licensing requirements, however the philosophical component of the strategies overlap.  At the core of the debate is the question of whether the traditional management/supervisory structure used to manage the company’s “dedicated” Financial Consultants is the best and most appropriate way to manage licensed bank employees who only spend part of their time engaged in investment sales.  In this article I will summarize the 3 primary models of platform program management, including benefits and disadvantages of each, and hopefully will provide some guidance to banks who entering the platform investment arena. Read the entire article.

The Latest on Bank Annuity Platform Programs

by Michael D. White

In the past decade (1995-2004), banks became the fastest growing annuity distribution channel in the country, selling $310 billion and producing an estimated $18.6 billion in gross commission revenue.  From 2003 through 2004, banks sold nearly $100 billion in annuities, generating approximately $5.8 billion in commissions, leaving little doubt that bank annuity sales programs have been embraced and are welcome sources of fee income.

One of the issues facing banks that want to get into the annuity business is the question of how the product can be sold to their customers. Many banks use licensed bank employees, or LBEs, to sell annuities, either as stand-alone sales forces or in tandem with dedicated investment representatives. Licensed bank employee-only programs, also known as platform annuity programs, have historically been more common at community banks. “Hybrid” programs, which use both licensed bank employees and full-time investment reps, are more common among large banks. Read the entire article.