Trust Updates Archive
(June 26, 2013 --Chicago, IL) -- Pennywise strategies that throttle-back spending on training for trust staff pose a threat to bottom-line growth, studies suggest. Banks are taking heed, according to Fiduciary Earnings & Expenses, which is reporting a near doubling in bank spending on training in 2012.
Relationship management drives sales and adds to profit. Nowhere is this more the case than in the high-touch trust management environment. To build and maintain customer relationships, institutions need well-informed and up-to-date trust officers.
The American Bankers Association, which has been offering trust schools since 1960, says that while banks recognize the need to manage talent, they often commit inadequate resources to the need. A Corporate Executive Board study found that failing to invest in training, especially for "high performers," comes at a high price.
High performers, according to the survey, view training as an entitlement, one that they see as improving their performance. These high performers rate job satisfaction as high as financial compensation.
A PriceWaterhouseCoopers study suggests that failure to identify and nurture talent is the leading the barrier to institutional growth, having a greater impact even than economic downturns.
According to the Institute for Employment Studies, even minor increases in talent-management spending can boost each employee's contribution to corporate profits by over $2,000 a year.
Despite those returns, the financial sector has historically spent less on staff development than other industry. According to a study by the American Society for Training and Development, per-employee investments across all industries average $1,103, with best in class organizations averaging $1,603. Spending by banks averages $657 per employee, pre-2012.
According to Fiduciary Earnings & Expenses, a sister publication of Trust Regulatory News, most trust institutions, prior to 2012 spent, on average, more on entertainment than they did on training. The exception was independent trust companies, which spend on average nearly twice as much on training than bank-owned trust divisions. Independents also generally report higher profit margins and return on assets than do bank-owned trust divisions.
According to FEE's upcoming report, trust industry spending on training was up from an average of 0.37 percent of total expense budget in 2011 to nearly 0.80 percent in 2012.
ABA Trust Schools
Effective training programs enable learners to "try, practice, and apply," according to various studies. An element of this is case studies.
The American Bankers Association's National Trust School, as well as its Graduate I and II Schools, are increasingly focused on case studies. The week long schools held September 22 - 27, provide a mix of case study work combined with classroom teaching.
For case studies, students work in teams to develop solutions that are then critiqued. Classroom teaching is interactive, says Maryann Johnson, Senior Vice President, ABA. Teaching is "focused on presentation and discussion, with instructors who are practitioners from the trust field."
Case management work continues offsite for students between Graduate I and Graduate II. These students are required to complete a series of 4 case studies before receiving their diploma. Each case study requires between 15-20 hours. Solutions are critiqued by the ABA's school's advisory board and its faculty who provide feedback to the students as each case is completed for review.
The National Trust School, is designed for trust executives with less than 10 years experience. The Graduate Trust Schools, are geared toward trust executives who have completed the National Trust School or have 10 or more years experience in the field. Students must be nominated by their bank in order to attend.
Completion of the National Trust School and Graduate School is the foundation for Certified Trust and Financial Advisor (CTFA), certification. For more information on upcoming schools go to http://www.aba.com/TS.
"Institutions can leverage their investment in training," says Jeff Peyton, Senior Vice President, Sun Trust Banks, "by having students that attend trust schools give presentations to staff when they return."
Leveraging training has the dual impact of educating staff and boosting morale. According to a Deloitte study of financial services executives, compensation, while one of the top reasons for changing employment, was not the top reason given. Executives were much more likely to change employment based on whether they perceived the firm as having "strong" leadership and options for career progress. A key component of progress was training.
An engaged staff is a productive staff, according to a September 2011 Harris Interactive study. The study found that some 21 million Americans were planning to change jobs over the next 12 months. The authors noted that "the irony is that some in top management seem to cling to the idea that the last few years of dire economic news and high unemployment have instilled fear in employees and bred complacency in managers."
A recent Watson Wyatt study found that companies that engaged employees, through training and morale boosting, financially outperformed those that did not by a factor of four. These findings are supported by studies that suggest that institutions with declining morale are more likely to experience attrition from high performers and to retain disengaged staffers.
For more on this topic, see Trust Regulatory News and Fiduciary Earnings & Expenses.
No statement in this issue is offered as or should be construed as legal opinion or advice or as an indicator of future performance.
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