HOW HUNTINGTON BANK DEVELOPED ITS
UNIFIED SALES PLATFORM
The $35 billion Ohio bank uses its financial advisors to sell
insurance, trust, asset management, and 401(k) products.

Cover Story - Spring 2007 | By Andrew Singer

Front row (l-r) Mary Navarro, Rob Comfort; Back row (l-r) Jon Greenwood, Randy Bateman Mike Moore, & Dan Benhase

What Huntington did have, recalled Benhase, was an "elite brokerage program." It was headed by Robert Comfort, president of Huntington Investment Company.

The word went out: 'If you want to continue to be a packaged-product rep, this is not the place for you.'

Why not utilize that existing sales force, Benhase asked—indeed, use it as the centerpiece of a new unified sales platform? Comfort's brokers would become the sole initial contact points in the delivery of all investment, insurance, retirement (401(k)), and trust products to the bank's customers.

This is easier said than done. Huntington's unified sales force didn't take shape overnight. It was a phased development spanning several years.

The first step—one familiar to most bank brokerage managers—was to build a branch-based investment program. This was largely accomplished by the time Benhase arrived, but it was followed by a less ordinary second phase: development of sales teams to work specifically with Huntington's commercial banking and private banking segments.

This effort began about four years ago, and it really required a different sort of investment rep, recalls Comfort in an interview with BISM. To 'partner' with these bank segments groups, the bank had to overcome 'cultural' differences. The senior financial advisors on these wealth management (WM) teams—unlike the branch-based teams—were largely recruited from outside the bank, usually from wirehouses. About 30 of Comfort's current 125-plus financial advisors serve today on these WM teams. They sell mostly fee-based products.

Fifty-seven sales teams

Huntington has 57 sales teams in all. Each team has a senior advisor, a junior advisor, and a licensed bank employee (LBE). There are 630 LBEs in all at Huntington; they sell only packaged products—annuities and mutual funds. Not every LBE serves on a sales team, obviously.

Much training was required, however, if this unified sales model was to be expanded. Huntington was able to do much of this internally. The bank has a large trust group, and its members worked hard to educate the brokers about trust products and services. Huntington also has a substantial employee benefits area. They pitched in, too. And so on. The bank 'partners' also made themselves available to go on sales calls and to help put proposals together.

It wasn't particularly difficult to get the bank 'partners' to participate. After all, they were looking for shelf space for their products and services. As things evolved, some trust people had to become wholesalers. So did some asset managers. And so on.

By way of example, Comfort cites Randy Bateman, the bank's chief investment officer and head of Huntington's Asset Management Group, which manages the Huntington Funds, the bank's proprietary mutual fund family. Bateman "has become an excellent wholesaler." He wants Comfort's sales teams to believe in him, Bateman, and his group as effective portfolio managers. "He's reached out" to the reps, Comfort says. "He constantly seeks feedback from them." How are they doing? What do they need? Bateman's group holds meetings with the reps, and they are available for conference calls. They call to thank them for business. They do this not only for the proprietary mutual funds, but also for the individually management accounts (e.g., the Huntington Asset Management Account, available to bank clients with $1 million or more in investable assets).

Bateman worked to develop more exciting products for Comfort's reps to sell. The Huntington Funds had become a bit "stodgy" when Bateman first arrived at the bank in 2000. They had an equity fund and a growth fund that were in a sort of "twilight existence," he says. The funds didn't have much of a reputation, and not much was being sold by the Comfort's brokers—only $180,000 in 2000.

But that didn't necessarily mean they needed to be shut out. "Rob told us, 'They can sell anything,'" Bateman recalls. Huntington introduced five new proprietary funds in 2001 and others later, including a small cap fund, an international equity fund, a 'new economy fund,' and others.

The new sales platform required some changes on the part of the financial advisors, too. The word went out: "If you want to continue to be a packaged-product rep, this is not the place for you," recalls Comfort. On the other hand, if a rep was interested in "personal growth," this was a good place. The advisors were also told that Huntington would "leverage" its bank partners in areas like trust and asset management "to go on [sales] calls with you," he says. Huntington developed a central sales support desk to help coordinate all this.

Dramatic gains

The results to date have been notable. "We've dramatically grown trust sales," reported Benhase at the BISA conference. Trust income has increased 60 percent in four years—all organic growth—and now stands at $23.4 million per year. This makes Huntington a trust growth leader among the nation's largest banks, he notes.

Trust income has increased 60 percent in four years—all organic growth—and now stands at $23.4 million per year.

Granted, some of that 'organic growth' has been from the upsurge in the stock market and the growth in asset values generally, grants Comfort. But a good portion has been from new business. Comfort estimates that 40-50 percent of the growth has been the result of the new unified delivery channel. (Huntington has trust administrators/new development officers who solicit business, too, and they have new-business goals. Most of their sales come from their internal books of business and working out in the community, such as with local CPAs and attorneys. They also have wholesaling goals.)

The broker sales force has also been successfully selling the bank's proprietary mutual funds. Over the past five years, Comfort's brokers have sold $450 million of the Huntington Funds, reports Bateman.

In the benefits area, Comfort's sales teams sold 80 401(k) plans last year—about one-and-a-half plans per sales team.

As for insurance, this piece was "farthest from the center," recalled Huntington's Insurance Chief Michael Moore at the conference. Insurance needed more work than some of the other areas. The challenge was to transform the sales force from a commodity-type product provider to a needs-based selling provider. Moore's aim was to develop a comprehensive list of insurance products, but to keep things simple. They would bring in advanced insurance specialists if and when the brokers needed help.

Huntington used Web-based insurance training for some brokers and one-on-one training for others. Brokers could select the training approach that they felt most comfortable with. The new sales model was slow to take hold. But by 2005, annual insurance premium sales exceeded $24 million, and by 2006 they reached $27.5 million. The top insurance products by revenue last year, according to Comfort, were: 1) wealth-transfer life insurance, 2) term life, and 3) long-term care. They are now "patiently teaching brokers how to sell fully underwritten life insurance," according to Moore.

By 2005 annual insurance premium sales exceeded $24.0 million, and by 2006 they reached $27.5 million.

Asked how one persuades an investment sales rep to sell life insurance—not often viewed as a quick or easy sale—Comfort brings up the subject of "accountability." Huntington's financial advisors have goals for all products: an insurance goal, a fee-based product goal, a 401(k) goal, and so on. This is on top of their overall revenue goals. Their ability to meet these individual product goals is entered on their performance scorecards and can have a "significant" impact on their annual compensation (although it is usually not a "life breaker"), says Comfort, who declined to disclose the actual percentage that can be added or subtracted.

Accountability can be a positive thing in the sense that it "forces people to try something they're not comfortable with," observes Comfort. Once the brokers do something new—sell a life insurance policy, say—they can get excited about it. It becomes part of their repertoire.

Huntington's retail-based investment teams are writing $2 million, $3 million, or $4 million in trust accounts on a "fairly regular basis," says Comfort. And it isn't at the expense of packaged products, which have not declined on a year-to-year basis. The reps are "talking to a whole new group that they never talked to before," notes Comfort.

The bank's larger aim is to become a trusted advisor to its customers. Today "you can't be a trusted advisor with packaged products alone," says Comfort. All of Huntington's senior and junior financial advisors have Series 65 or Series 66 (registered investment advisory) licenses that enable them to sell fee-based products.

Many financial advisors have been developed internally. Most of the bank's junior reps, for instance, have come up from the LBE program, which serves as a kind of "farm system." The average three-person 'team' generates $1 million in annual revenues, according to Comfort.

As for the contribution of the Huntington's LBEs, the average "revenues per licensed banker" was $2,750 in 2006, up seven percent from $2,578 in 2005, according to the bank's 2006 10-K filing. As noted, however, not all 600-plus LBEs serve on sales teams, and it can be presumed that those LBEs on teams are more productive than the average licensed platform rep.

The product mix differs between the wealth management brokers and retail branch-based brokers. The largest individually managed accounts (e.g., Huntington Asset Management Accounts) are generated from the WM group. (Again, Huntington refers to its brokers who work with private and commercial bankers as their wealth management group, in contrast to the retail- or branch-based brokers.) The retail-based brokers still sell mostly packaged products.

That doesn't mean that the branch-based brokers are strangers to fee-based products. Indeed, retail-based financial advisors accounted for 54 percent of all fee-based business at Huntington in 2006, compared with 46 percent generated by the WM brokers. This share breakdown applies to both individually managed accounts and mutual fund wrap accounts. And while the WM brokers accounted for much more fee-based business on a per-capita basis—there are only 30 of them, after all, versus some 100 retail-based advisors—that is still a sizable chunk of fee-based business coming from branch brokers.

Most of the fee-based business, even among the retail-based brokers, is written by senior reps. But Huntington has no "silly rules," says Comfort—by which he means that junior reps are not required to hand off business if and when it reaches a certain dollar level. They sell wrap accounts just like the senior reps.

'Do you like who you're working with every day?'

Asked about referrals, Comfort noted that these come from the branches, from existing clients, and from bank partners, like small-business lenders who are part of the retail bank. ('Middle market' lenders are grouped in Huntington's commercial bank segment.)

Integration is required before one can count on a steady flow of referrals. At the BISA conference, John Greenwood, a senior vice president in Huntington's retail bank, noted that one key question that has to be asked in such an enterprise is: "Do you like who you're working with every day?" If not, integration of the sales force won't succeed.

If Greenwood didn't 'like' Rob Comfort, for example, retail distribution would founder. That's because tensions and antipathies tend to be picked up lower down on the management chain, suggested Greenwood. The retail bankers sense that their boss doesn't care for the brokerage boss, and so on.

For what it's worth, the retail and brokerage units seem to be getting on just fine. "Pete Dunlap is always at my team meetings," said Greenwood. (Dunlap is national sales manager on the retail side for Huntington Investment Company; Paul Gartner is national sales manager on the wealth management side.) "He's an integral part of my leadership team."

The Huntington sales model stirred some interest at the BISA conference. Rob Varner, executive vice president at Synovus Securities, Inc., speaking at another conference session, reacted positively to the idea of a unified sales platform model. "I love the concept of one sales management team," he observed. It was one way to break down "silos," which continue to thwart many bank brokerage initiatives.

Pat Bonavia, who until recently headed the wealth management segment at AMCORE Financial, expressed some doubts about this approach, however. For one thing, who is going to service the high-net-worth client? Can those super-charged brokers really provide the necessary follow-up care and service that is required under the circumstances? (Huntington, for its part, answers that it has specialists for that purpose.)

For this sort of effort to succeed, it has to be grounded in an organization's mission and values—including "doing the right thing for the customer," says Comfort. The brokerage people have to talk to the trust people, they have to talk to the employee benefits people, and so on. "How do you win the hearts of partners?" is the abiding question.

"One excuse we never accept is: 'I can't get enough support from my bank partners,'" says Comfort, who joined Huntington in 1995 as a regional sales manager. (He has been running the investments program since 1996.) His view is that "You have to earn that support."

Developing 'life skills'

When embarking on a project of this sort, it is important to develop not only technical skills, adds Comfort, but also "life skills," or 'people skills.' This helps reps to get through challenging times.

To this end, Huntington employs Focus 3's Tim Kight's "Personal Best" program, which helps reps out in areas like communicating more effectively and managing their emotions.

Comfort's sales force will soon expand as a result of Huntington's acquisition of Sky Financial. That merger should be completed by the third quarter of 2007. At that time, Huntington will have about 175 financial advisors and 900 LBEs. As it integrates the new brokers from Sky Investments, the newcomers will go through the Personal Best program, says Comfort, who adds that integrating another bank's personnel is never an easy task. "Mergers often blow up—often because of 'people' issues," he notes. "Integration is never easy."

A leap of faith

Comfort wasn't inclined to minimize the effort required to make this all work. Moving to a unified sales force is "not easy," particularly in the early stages, he says. There are cultural differences to overcome. It took a leap of faith on the part of the Huntington's 'partners' (e.g., commercial bankers and private bankers) to trust the brokers and "to see the potential in brokers selling for them."

'One excuse we never accept is: "I can't get enough support from my bank partners."'

On the brokerage side, persuading reps to sell new products and services—ones with which they were not necessarily comfortable—was a challenge. The brokers "were operating in new areas that they had never operated in," recalls Comfort. And in fact, many times along the way management said, "It's not working."

The reason they persisted—indeed, were "unwavering" in their purpose—he adds, is that they were convinced this was the right thing to do for their customers as well as their bank partners.

While they have not yet 'arrived' with regard to the integration project, they are "better than halfway there," says Comfort. "Everyone has accepted that this is what's going to be. This isn't going away." They have had enough success (i.e., 60 percent trust growth in four years) "so that we can't turn back." That said, "There are still teams that resist, still 'partners' that resist—there is still a ways to go."

Andrew Singer is editor-in-chief and publisher of Bank Insurance & Securities Marketing magazine. He can be reached at asinger@bisanet.org