Even though account managers did not shower their firms’ compensation structures with praise, they were somewhat happier than last year with their paycheques, this year’s Account Managers’ Report Card shows. The weighted average rating for total compensation increased to 7.3 from 6.8.
Montreal-based National Bank of Canada fared best overall among the banks and credit unions with a score of 7.8, while CIBC account managers rated their bank most improved, with a rating of 7.0 — a 1.3-point improvement over the 5.7 the bank’s employees gave it last year. Meridian Credit Union scored the lowest at 6.9, but that is an improvement over the combined credit union score in 2005, in which account managers gave their employers a rating of 6.7.
Although compensation is rated on the lower side in terms of performance, it is high in terms of importance. Comments from account managers suggest the main problem with compensation is that they aren’t getting enough of it.
“Compensation is up to industry standards,” says one Bank of Montreal account manager. “But they pay us fairly low for what we bring in — and I do not see signs that it will improve.”
As for reward programs, some account managers think the programs are great, while others consider them a poor substitute for fair pay.
“We are doing great in rewards and recognition,” says one TD Canada Trust advisor. “I’d rather have a larger paycheque. That would make me happier than dangling a reward in front of me.”
National Bank offers a lot of extra rewards, with financial services staff receiving anything from staff trips to CD players to MasterCard reward points. Although National Bank executives declined to comment for this year’s Report Card, their account managers do seem to appreciate the additional perks they receive, which may explain why it has the highest rating. An account manager in Ontario says the best parts of working at the bank are the flexibility and the rewards: “It’s not so much the salary, but the rates, incentives and benefits.”
Most financial institutions offer some combination of salary and bonuses; with a few exceptions, account managers at banks and credit unions don’t receive commissions for any of the work they do. One notable exception is BMO, which scored a 7.2 for compensation.
Account managers at the bank who are also financial planners are paid both a base salary and commissions, says Vivian Lee Major, relationship manager for BMO’s personal and commercial client group. Commissions are given not only for individual sales but also for referrals to fellow employees — which, many account managers say, keeps people from getting too greedy and ensures that a client is referred to the person in the branch who can best meet the clients’ financial needs.
As one BMO account manager in Alberta puts it: “You are rewarded on all levels for doing what’s best for the client.”
Meanwhile, Bank of Nova Scotia account managers are paid a combined salary and performance-dependent variable bonus, says Wendy Hannam, executive vice president at the bank. “There’s a minimum and maximum variable,” she says. “[It’s] not based on a grid. There are five performance levels, and advisors get a different percentage for each level they reach.”
Royal Bank of Canada is also on a base plus variable compensation structure, which, vice president of wealth-management services Michael Walker says, is split about 60/40. “Within that variable component, it’s based on the growth of the advisor’s portfolio, and reflects both investment as well as credit growth in the book,” he says.
Royal Bank account managers rated their bank’s compensation structure a middle-of-the-pack 7.3, roughly the same as last year’s 7.2. But they gave compensation a high importance rating of 9.1.
Comments from CIBC account managers were largely negative. “They need to pay for overtime,” says one account manager in Ontario. A colleague in the West adds: “A good chunk of our bonuses are paid into CIBC shares that take three years to mature. It’s more a retention [strategy] than a reward.”
On the credit union side, Coast Capital Savings Credit Union has a three-tier compensation model of salary, quarterly bonuses and an annual bonus. There are four levels of account managers within the firm; financial planners are eligible for the highest bonuses. “The next level down has a slightly lower compensation level, and so on and so forth,” says Trudi Kloepper, senior vice president of investment services.
@page_break@However, Coast Capital account managers say the main problem is that the payout model is too complicated. “Bewildering” is how one account manager describes it. Another says compensation is the worst aspect of her job: “There’s absolutely no way to monitor how you are doing. No one trusts it. It’s demoralizing. I’m hoping that it’s something management will address. It’s ridiculous; it makes my blood boil.”
Vancity Credit Union‘s account managers are on a base salary with the possibility of profit-sharing, depending on how well the branch does, says Lydia Johnson, vice president of sales and services: “If they do a bang-up job, advisors will have extra compensation considered in their annual review.”
As one Vancity account manager says: “It would help if there were different levels of pay based on knowledge specialization.” Another adds: “Account managers are not compensated at the market level.”
At Meridian, account managers are strictly on salary. But this is an advantage, says John Wink, senior manager of investment services and insurance: “Because, by saying to our members that our staff aren’t compensated for the sale of individual products, we become product-neutral.”
Instead of commissions, Meridian account managers get an annual bonus based on “individual performance and overall corporate results.” IE