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Step by step, an Iowa community bank assembles a successful wealth management program
Outside the Quad Cities in the heart of the Midwest is a family - owned community bank that has been serving the community of Burlington, Iowa, for more than 90 years. As its name implies, Farmers & Merchants Bank & Trust has historically offered banking and trust services.
But for 50 years, trust services at F&M Bank were a loss leader, available as a convenience for existing clients only. Then in 2001, the bank's board of directors approved a plan for expanding trust services into a profit center. Since then, the bank's wealth management services have grown to include full-service brokerage, insurance and financial planning.
John Wagner, who was appointed as trust department manager in 2001, oversaw the bank's wealth management expansion. He and his eager team felt F&M Bank was behind the times in taking advantage of essential new market opportunities. "We were giving the business away and weren't seeking new business," he says.
Convinced that F&M Bank had to expand its offerings to stay relevant with today's depositors, the board of directors stood firmly behind the expansion plans. And with over $16 trillion in baby boomer retirement dollars expected to change hands over the next decade, Wagner says, the community bank's management wanted to move into position to capture more of those assets.
F&M Bank's new, fully-integrated wealth management division emphasizes financial planning as the key to bringing in more of a client's financial assets. Clients can test-drive wealth management services and get a customized plan designed to meet their financial goals, whether those goals are funding an education, a home, a retirement or anything in between. At F&M Bank, all clients with wealth management goals-regardless of their income or assets-have access to financial planning resources, Wagner says.
According to Bill Reid, president of ICBA Financial Services, ICBA's Memphis-based retail financial services corporation for community banks, Wagner and his colleagues have engineered a wealth management model that utilizes a salaried staff to offer customers an integrated product mix that covers a lifetime's worth of financial needs. That model has the bank primed to capture the entire customer relationship-and the extra noninterest revenue streams that go with it. "They...