In 19 years of practice, my attitude of working with banks has turned 180 degrees. When I began my practice in the early 1990’s, banks frustrated me. Many of them were unwilling to consider my brilliant ideas as a young practitioner. Furthermore, many larger banks with trust departments had well-ingrained relationships with the old, grey-haired, established attorneys from the large firms. It was impossible to break through those barriers. In my early experiences with banks, I found their biggest push was to ensure every plan you created named it as trustee while in my heart I believed the family members were the best people to make the decisions regarding the family. Over the years, wisdom has taught me they weren’t totally off target and I was not totally on target.
As I sit here now enjoying several wonderful relationships with banks, I felt it interesting to reflect up on the things that have made the relationships most effective. Like all pearls, there are black ones and white ones, perfect ones, and some with blemishes. Banks as referral sources are no different. The biggest cons of working with banks, is they tend to be bureaucratic with many levels and lots of Vice Presidents. National and regional banks have multiple locations and often are controlled “somewhere else”. For smaller law firms it is more difficult to service banks with multiple locations as it tends to stress the internal systems and the time the smaller firms have to devote to their referral relationships.
The pros on the other hand for those willing to conquer the cons, are banks have an unlimited supply of customers and unlike typical financial professionals, the customers come to them. The bank rarely needs to go out and seek the customer. Another powerful aspect of working with banks is they have deep customer relationships. Many times over the years I have created extensive estate plans only to have the client tank them because the teller at the bank told them not do it. These deep customer relationships when you win over the relationship of the individual bankers are critical in building a similar relationship for you with the client. Another very positive aspect of working with banks is the diversity of the customer base. Most banks have many older people, business owners, and professionals as customers. The common theme, they all have money; therefore, they all need some form of estate planning. So what are the elements to working effectively with a bank?
Over the years, I have seen smaller banks be acquired by middle-sized banks and acquired by larger banks. The consolidation of the banking industry has been widespread over the last 10 or 15 years. But one main struggle seems to plague all banks, disconnect between the banking personnel and their financial services division. In many banks, the branches are hurt if they make a referral of the cash assets to the financial service professional to be invested in an annuity or other financial vehicle. This dis‑incentive, in many cases, leads to an ineffective relationship between the banking and the financial services division of the bank. The greatest success I have had over the last five years is having created a system to actually solve that problem with banks. Since most branch managers are hurt by losing deposits, we encourage them to work with us so we can discover through our process other assets of the client to refer to the financial services department. Our client process includes; A vision meeting to identify the needs of the client and the plan they engage us for, and a post-vision and pre‑design meeting to help identify and create a table of all client assets. As part of the design of the estate plan (the attorneys second meeting in the process) we not only design and create the estate plan and all of the associated documents, we also create the funding plan to instruct the client how to fund all the various assets into the different estate planning vehicles we have created for them.
To the bank, the most important column on the funding table is the “transfer to” column. This has become their favorite part of our process because we routinely recommend clients consolidate all of their assets outside of the bank with the bank to hold as many assets as possible in one location to the extent possible to minimize administrative struggles in the event of an unforeseen or anticipated disability or death. It also builds the professional “team” to help ensure their plan actually works. In our process, over 90 percent of the clients that work with us will consolidate 100% of their assets with the adviser that referred them and help build the professional team. This is a very strong statistic the banks love and has created a reason for them to continually flow their clients to us so the assets can be discovered and received from other financial institutions for investment, rather than from their own bank’s deposits. While a common concern of clients is not to put all their eggs in one basket, we advise them while they do not want to put all their eggs in one basket (one investment) they do want all of their baskets in one hen house (easier to watch and protect from foxes). With the diversity of the financial services industry today, banks now can offer full financial services the wire houses traditionally held control of. Obviously, as an attorney, we must be independent and confident of the service of the bank and the integrity and competency of the individual advisers and personnel we work with. The more relationships you can create within the bank the greater the likelihood of a synergistic approach for helping clients ultimately achieve their goals.
Several months ago, I met with a regional business banker for a large regional bank. After conducting my standard Synergy Meeting, I identified her concerns and pains in relation to serving their business clients. After explaining our process and our business protection solutions, she immediately saw the value but was unable to implement any referral relationship because of the bureaucracy. Over the course of the next several months I undertook to meet with every branch manager (all 14 of them) and each financial service professional (7) individually to a Synergy Meeting to identify their needs and share my process. As a result, I started to identify how our firm’s educational process and client estate planning process supports them in what they do more specifically or business owners protection trust. At the end of this three-month period, after over 20 meetings, I had the opportunity to speak with the regional manager again whom smiled and said Everybody wants to work with you. What do we have to do next? Obviously, with a little work, a pearl can become a gem.
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