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One of the major impediments banks have in catering to the mass affluent market, generating new revenues and driving growth, is the bank’s own sales force. Some of the shortcomings we’ve analyzed at financial institutions in all corners of the globe include:
Key metrics such as lead generation, book development and how sales representatives are spending their time are not tracked.
Compensation models don’t incentivize the right client-facing and sales activities.
An informal hiring structure, left to sales leaders to determine the attributes of who they should hire, and how to pinpoint those attributes in candidates.
To overcome these limitations, banks need to re-examine and analyze all aspects of the sales function, including recruitment, training, compensation, career advancement, metrics tracking, sales support and operations.
Without a doubt, sales force effectiveness is a vehicle to help drive growth. The key is to understand and unlock the potential value that already exists within your sales force.
Squeezed by increased regulatory pressures, new competitors and an uncertain economy, banks around the world are increasingly looking to generate new revenues and drive growth by catering to the mass affluent market. These consumers—with investable assets of $100,000 to $5,000,000—number millions of households globally and represent a lucrative market.
But there is a major impediment to improving share of wallet with this segment—banks’ own sales force. Too often, banks miss opportunities to win investment assets from customers and prospects because they haven’t optimized their sales force.
Consider some of the shortcomings we’ve analyzed at financial institutions in all corners of the globe:
Banks also need to ensure that their advisors have an in-depth understanding of their clients’ needs. Recent Accenture survey research revealed that many financial advisors significantly overestimate the investment savvy and risk appetite of investors, indicating there is much work to do in this area. For example, our study showed that advisors are three times more likely to describe their clients as “very knowledgeable” about investing than investors themselves (42 percent compared to 12 percent, respectively).
To stay competitive in the dynamic wealth management landscape, banks should improve the effectiveness of their mass affluent sales force. That means re-examining all aspects of the sales function, including recruitment, training, compensation, career advancement, metrics tracking, sales support and operations.
By viewing their sales force through a continuum or “lifecycle,” banks can better assess the opportunities for making interventions for sales people at each stage of the lifecycle. The four stages of this lifecycle are:
Generating high performance. Develop a “behavior catalog,” match sales people to clients, analyze how sales people spend their time and leverage sales analytics.
Retaining talent to sustain performance. Analyze sales representatives’ performance management and compensation models, provide incentives for sales managers to sustain improvements, deploy automation, straight-through-processing and pre-filled forms to reduce administrative burdens, and install a “career progression model.”
Recruiting and hiring. Create a recruiting profile, develop a strong pipeline of potential candidates and include top performers in the recruiting process.
Developing new sales representatives. Create a sales force effectiveness department, develop a centralized onboarding team, provide customized, one-on-one coaching and use multiple delivery methods to provide a rich, blended learning environment that addresses key capability gaps.
Bank sales executives should leverage opportunities to improve the effectiveness of their sales force at every phase of the lifecycle, from recruiting and developing new sales representatives, to generating and sustaining high performance. The potential payoff can be huge.
In this report, we have presented several interventions that have yielded impressive results at a variety of financial institutions worldwide. Yet, there is no single right answer for any bank. Each bank should undertake a robust, in-depth analysis of its mass affluent sales force as a first step to achieving these kinds of outcomes.
That analysis, in turn, will facilitate identification and prioritization of low-investment, high-return interventions. It will also highlight other areas of the ecosystem in need of improvement—such as sales strategy, CRM tools, branch director training, commercial governance, back office processes and operating model—that impact sales representatives’ effectiveness.
October 28, 2013
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