ABA Banking Journal - January/February 2016 - (Page 30)

FEATURE > WEALTH MANAGEMENT AND TRUST BANKING Trust Gap Filling the 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 other pursuits. "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 $429 billion. 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. 30 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

President's View
Picture This
Economic Outlook
Community Engagement
Cover Story: Train To Your Advantage
Filling The Trust Gap
Banking In The Sweet Spot
Safe Banking, Savvy Seniors
Human Resources
Agricultural Banking
Board Matters
ABA Compliance Center Inbox
Legal Briefs
From The States
Corporate Social Responsibility
Index of Advertisers

ABA Banking Journal - January/February 2016