ABA Banking Journal - January/February 2016 - (Page 30)
> WEALTH MANAGEMENT AND TRUST BANKING
While banks face a looming shortage of trust
officers in the coming years, a mix of recruiting, grooming,
networking and politicking will go a long way to close the gap.
BY CHARLES KEENAN
ll of those strategies will be needed, as the shortage
could become acute. Banks over the next five to 10
years will encounter a retirement wave of trust officers
as baby boomers, many of whom have been working
in the field since the 1980s, leave their careers for
"It's a legitimate concern industry-wide," says R. Jeffrey
Peyton, SVP and group fiduciary executive at $184 billionasset SunTrust Banks in Atlanta. As much as 25 percent to
45 percent of the trust workforce will retire, Peyton estimates,
including those in his own unit of 25 trust officers for highnet-worth clients in Georgia, north Florida, Tennessee and the
Carolinas. The exact percentage will depend on when these
officers decide to retire.
The task of filling empty positions has become all the more
challenging by the growth of the trust industry itself. Not only
will the retiring baby boomers need trust work done for their
collective amount of vast wealth, but banks will also continue
to need extra staff to help fill the demand. Banks are eager to
ramp up trust services. Ever since the financial crisis, years
of declining interest margins have led financial institutions
to increasingly rely on noninterest income as way to boost
earnings, with fiduciary activities a vital part of the strategy.
Commercial banks made $30.9 billion in 2014 from fiduciary
activities, up 21 percent from 2010, according to the FDIC. Yet
interest income fell by 11 percent over the same time period to
What also makes the search for trust officers difficult is how the
career path competes with other financial positions. Younger
professionals often choose wealth management, investment
banking, or other career tracks. "It's not an area that new
recruits focus on when joining the banking industry," notes
Tariq Mirza, principal of the bank advisory and regulatory
services practice at Grant Thornton.
ABA BANKING JOURNAL | JANUARY/FEBRUARY 2016
In this competition for talent, trust officer positions might be a
tougher sell at times versus other financial career tracks. For
example, the median pay for trust officers in the United States
is about $64,000, with a low of $46,000 and high of $113,000,
according to PayScale. That compares with a lower median of
$55,000 for a financial advisor, but that position comes with a
much greater income potential, with a high of $192,000 in total
pay, according to another survey.
Kaleidoscopic combination of skills
The skills a trust officer needs depend on the bank. These days,
trust officers often need to be jacks of all trades, especially
at smaller financial institutions. They must have experience
in financial planning, tax law, fiduciary law and investment
management. They also need strong people skills to work
with clients and sales experience if they're expected to grow
a customer base, says Jessica Beavers, president of Bankers
Trust Company of South Dakota, a subsidiary of $3.3 billionasset Bankers Trust Co., based in Des Moines, Iowa. "It's the
hodgepodge of knowledge that we're asking trust officers to have,"
Beavers says. "The trust officer just can't be defined by one
discipline. It's this overall knowledge base of the industry you
have to have."
Yet while trust workers tend to be generalists at smaller
institutions, at larger banks the work is more specialized. Due to
bank consolidation over the past 30 years, much of trust work-
especially at larger institutions-has become more centralized.
Digital innovations over the past 10 years have also made
centralization much easier. All of the consolidation means that
much of the administration of trusts is now handled from one
location, meaning the trust officer now is either expected to spend
more time in planning and client meetings, or work more behind
the scenes on the administration part. "Some folks thrive working
with clients, others say 'I really like the internal administration,'"
says John Elliott, SVP and trust director for Wells Fargo Private
Bank. "You've had an evolution of the trust officer job."
Table of Contents for the Digital Edition of ABA Banking Journal - January/February 2016
Cover Story: Train To Your Advantage
Filling The Trust Gap
Banking In The Sweet Spot
Safe Banking, Savvy Seniors
ABA Compliance Center Inbox
From The States
Corporate Social Responsibility
Index of Advertisers
ABA Banking Journal - January/February 2016