Main Reason For RM Leaving: Encouraged To Do So For Underperformance
The main reason for relationship managers (RMs) leaving is that they have been ‘encouraged to do so‘ by the banks! Not very encouraging… And by the way, what do you mean by ‘underperformance‘?
The latest Global Private Banking and Wealth Management Survey has yielded some interesting (but long known?) results. Snippets of the report were reported on The Straits Times (Hunt for good private bankers is on) and The Business Times (RMs in S’pore, HK don’t stay in the job: PwC). Anecdotal evidence points to very high attrition rates for RMs. This has been highlighted by many different reports before. This latest one just confirms it. And the reason for the attrition rates? They have been told to, or in the report’s words, ‘encouraged’ to do so.
I cannot find any definition for ‘underperformance‘. But from my limited intelligence, it points to sales targets. Over 80% of the respondents indicate that the Key Performance Indicators (KPI) are Revenue and Net New Money Growth. 8 out of the top 9 KPIs are related to revenue, profitability or cost.
No matter what the job title is, once there is a high sales target to meet, the client-adviser relationship can become more harmful than helpful. Pressure to meet transactions-based KPIs can easily sway the focus from advising to getting the next sale. How can the RM remain focused on giving good advice when the sales target is looming over them and failure to meet them could cost them their job?
It is of paramount importance to stay away from transactional models.