Inside the Dealers 03/08 – Planning next step on National agenda

The banks are getting into financial planning in a big way — and the National Australia Bank is no exception. John Wilkinson reports on the growth of the National’s premium planning.

The National Australia Bank is expanding its financial planning operations and has recently recruited an additional 100 planners.

The growth follows the bank's more aggressive approach to the financial planning industry and the fact that the National sees itself as a financial services company, not just a bank.

Recent inflow figures for the National confirm its push to become a major provider of financial services in Australia.

Currently, National financial planners provide 90 per cent of the inflows, with just 10 per cent coming from external independent planners.

Planners in National are attached to the bank and not National Australia Financial Management (NAFM).

Vincent Berne, head of premium planning, explains the structure.

"Financial planners are run by the bank and we source products from NAFM," he says.

The planners are based in a financial services centre, which is supported by a number of bank retail branches. At present these centres are in metropolitan areas, but planners are also based in National business centres throughout Australia.

A financial services centre in a metropolitan area covers a number of suburbs and could have any number of branches supporting the centre. Each centre has premium bankers, mortgage lenders and between five to six planners.

In rural areas the centres are based in major regional towns like Albury or Bendigo and cover a wider area.

"It is a hub-and-spoke operation, with the retail branches feeding inquiries to the planners," Berne says.

There is also a smaller version of the centres, financial service suites, with just one financial planner.

"A simple distinction between the roles of the branches and the centres is that the centres are about advice and the branches are about transactions," Berne says.

"The financial planners get business referrals from the branches and the call centre at head-office."

This means advisers are not cold calling to seek business because the two sources are providing more than enough business referrals, Berne says.

National has a client base of 3.5 million customers, but Berne says only 3.7 customers per 100 have been in contact with the bank's financial planners.

"We haven't even touched the surface when it comes to financial planning and you can see there are big opportunities," he says.

When a planner joins National they are automatically allocated to a centre and Berne says that enables them to learn how the bank runs its financial planning operations.

"It takes about a year to come up to speed. This way the new planner has the advantage of working with people who know our ways," Berne says.

Planners in the centres do not specialise. It is expected that a National planner will handle all aspects of giving advice, although Berne admits some people do have more expertise in certain areas, such as estate planning.

"Our planners have an unlimited licence and are expected to become involved in all aspects of financial planning," he says.

The only thing planners are not expected to handle is tax planning. The bank has a separate team to provide back-up in this area. Likewise, if a client wants a traditional banking product, such as a mortgage, they are passed back to the retail bankers.

"The planner undertakes a financial needs analysis of a client and areas such as lending are passed to retail banking, although the planner will make sure all the needs are packaged together," Berne says.

The wide range of referrals a planner will be expected to handle at the National means that experience plays a key role in the selection process.

Berne says: "We are looking for people with experience in the financial services industry, are involved and have DFP qualifications.

"We want a history of success in financial services and associated areas. Then we look to see if the potential employee has the right character, as they will need to be seen as a leader."

The role as leader is important because financial planners at National are seen as team leaders. They operate at a senior level in the staff structures at the financial services centres.

"Our financial planners are managers and are expected to have leadership capabilities," says Berne. "This is why we want mature, experienced people who can provide that leadership."

Education of planners plays an important part in their career and National runs continuous training programs. The standard training includes sales coaching and personal development programs.

Recently the bank has introduced 'The National Way' which is a program detailing how staff should deal with customers. All planners are doing this program

The bank pays for all DFP training and is encouraging planners to become CFPs.

"We expect all our planners to be at DFP 8 by 2003, and for them then to become CFPs," Berne says.

Currently National has about 60 CFPs out of a total 300 planners.

While there is no scheme for training graduates into financial planners at the National, Berne says the bank has started a basic financial planning course and is to begin a para-planner training program shortly.

Compliance for the planners is provided by the bank's own compliance unit.

There are compliance teams in every state and planners are evaluated continuously to ensure that they meet the necessary standards.

"Our compliance teams undertake desk-top and file audits and it is the responsibility of the area sales managers to ensure compliance standards are meet," says Berne.

The area sales managers have a proper authority licence and are in charge of the planners, personal bankers and mortgage lenders in the service centre.

The immediate career progression for financial planners is to become an area manager, but Berne admits few take this option as it takes them away from the true financial planning role.

"People don't want to move away from financial planning as an area manager's role takes them into the banking side of the business," he says.

The remuneration packages, which are generous by industry standards, also mean many planners are happy to stay in their existing role.

"The career for a National financial planner involves building up their own client base, which brings remuneration benefits," Berne says.

The planners are set targets, the basic one being to cover their operating costs, and all are subject to managerial reviews.

National financial planners have always been able to sell a wide range of products sourced from outside suppliers.

Berne says the bank is more interested in creating an approved external supplier list, rather than a preferred product list.

Fund managers on the preferred list at present include BT, AXA, AMP, Mercantile Mutual, Perpetual, Macquarie, J. B. Were, Challenger International and MLC. In additional the bank's two in-house fund managers, County and National Asset Management, provide products for the planners.

"The product we sell is financial planning advice and we buy products to sell to our clients," Berne says.