Insights on Incentives has as its sole purpose the facilitation of thought and discussion on the subject of incentive compensation for banks and credit unions.  Once a month NSS will be sending out an e-mail with one insight on the area of incentive compensation.  The insights will come from our research, discussion with customers and finally, those of you who decide to offer an insight on this important sales management issue.

Assets under management is a familiar phrase in the financial advisory business. Often it is used as a method for pricing the company’s management of a mutual fund or portfolio and finding its way more and more into the incentive structure for frontline financial advisors. Certainly, the Wall Street scandals of the last few years have led many companies from commission based incentive schemes to an assets under management approach where the fee is split between the company and the financial advisor.

The same trend is emerging in banking under the guise of deposit growth. Growing your customer’s assets under administration with your bank and credit union is key to customer retention and customer satisfaction. Some banks and credit unions have factored this into the balanced scorecards and incentive compensation systems for management. Look for this to find its way down to the frontline sales personnel in place of product sales commissions, just as assets under management is replacing product commissions for financial advisors.

Insights on Incentives is brought to you by NSS Corp.