Death of the salesmen: Why private bankers should no longer be product pushers
Simon Mortlock
Eliminate sales targets, stop product pushing and don’t hire juniors for client-facing roles – that’s how the private banking sector should knock itself into shape, says Jean Pierre Cuoni, founder and chairman of EFG International.
The financial crisis has highlighted the potential dangers of a sales-driven private banking model. “Products were ill sold by people who didn’t understand what they were selling, which created disappointment,” said Cuoni, speaking at the recent Private Banker International Wealth Summit in Singapore, organised by VRL.
An aggressive sales culture in a private bank should be stamped out, he addded. “It puts you on the wrong path. You become a salesman. You should be an entrepreneur, a businessman, not a salesman.”
At some larger firms (not EFG, Cuoni hastened to add) private bankers are misused as distribution channels for the investment bank’s products. The Chinese wall that traditionally existed between the two divisions has broken down. “Selling is the name of the game irrespective of whether the client needs it.”
Cuoni continued: “Your bonus, promotion is going to depend on how much investment banking product you sell. This is wrong. It’s not putting the client first and is putting the private banker in a difficult position.”
Instead, bankers need to devote as much time as possible to servicing high net-worth individuals and should “belong to the clients and vice versa,” Cuoni told the conference. The risk of relationship managers jumping ship along with their wealthy customers is worth taking. While EFG lost a few bankers who couldn’t perform during the financial crisis, it has otherwise enjoyed good retention rates.
The firm’s emphasis on relationship building means it is better off recruiting seasoned bankers. “We have no choice but to put experienced, professional people in front of clients…Clients don’t need to deal with clerks who lack authority.”
Eliminate sales targets, stop product pushing and don’t hire juniors for client-facing roles – that’s how the private banking sector should knock itself into shape, says Jean Pierre Cuoni, founder and chairman of EFG International.
The financial crisis has highlighted the potential dangers of a sales-driven private banking model. “Products were ill sold by people who didn’t understand what they were selling, which created disappointment,” said Cuoni, speaking at the recent Private Banker International Wealth Summit in Singapore, organised by VRL.
An aggressive sales culture in a private bank should be stamped out, he addded. “It puts you on the wrong path. You become a salesman. You should be an entrepreneur, a businessman, not a salesman.”
At some larger firms (not EFG, Cuoni hastened to add) private bankers are misused as distribution channels for the investment bank’s products. The Chinese wall that traditionally existed between the two divisions has broken down. “Selling is the name of the game irrespective of whether the client needs it.”
Cuoni continued: “Your bonus, promotion is going to depend on how much investment banking product you sell. This is wrong. It’s not putting the client first and is putting the private banker in a difficult position.”
Instead, bankers need to devote as much time as possible to servicing high net-worth individuals and should “belong to the clients and vice versa,” Cuoni told the conference. The risk of relationship managers jumping ship along with their wealthy customers is worth taking. While EFG lost a few bankers who couldn’t perform during the financial crisis, it has otherwise enjoyed good retention rates.
The firm’s emphasis on relationship building means it is better off recruiting seasoned bankers. “We have no choice but to put experienced, professional people in front of clients…Clients don’t need to deal with clerks who lack authority.”
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