Account managers aren’t ecstatic about their compensation. Although some welcome the security that comes with working for a bank or credit union, a compensation review may be in order.

According to this year’s Account Managers’ Report Card, the overall compensation rating dropped slightly — to 6.8 this year from 7.0 last year. The compensation package — usually some combination of base salary plus incentive or bonus — “doesn’t reflect the expected workload,” says an account manager with CIBC in British Columbia.

Most notable was the drop among credit union employees. They rated their compensation 8.2 last year — the top mark — but only a desultory 6.7 this year. Yet comments from credit union employees across the country are often positive. An Ontario account manager mentions the “good salary and commission.” Another Ontario credit union advisor says good compensation was among the best aspects of working at a credit union.

In replying “yes” to a question about whether account managers at credit unions would recommend their firms to other advisors, a Newfoundland employee mentioned the “good security” as a key factor.

CIBC, too, took a hit on the compensation rating, falling to 5.7 this year from 6.6 in 2004 — coming in last, again. But, unlike the credit unions, the comments from CIBC account managers were predictably negative. Several CIBC advisors put compensation among the worst aspects of working at the firm.

One former CIBC banker, now working for Bank of Montreal in Ontario, says his present compensation “is much better than [at] CIBC.”

The compensation structure in all banks and credit unions is a mixture of base salary, which accounts for 70%-80% of total pay, and bonuses. At credit unions, compensation is based on sales and client retention, says Don Rolfe, president and CEO of Vancouver-based Credential Financial Inc. “It’s simple — not different from what others are doing in the marketplace.”

However, Rolfe emphasizes the credit union approach to customer retention as a factor driving account manager compensation.
Loyalty is key, he says. Credit union managers “want to maintain that [loyalty] because it is a strategic advantage,” he says. The bottom line is account managers at credit unions get a base salary, plus a bonus based on achieving targets.

It’s the same over at Bank of Nova Scotia, says Wendy Hannam, executive vice president of domestic branch banking in Toronto. “It’s salary-based, but there is an incentive component.”

Despite the fact that bank and credit union employees provide a variety of products beyond basic banking services, commissions don’t seem to part of their compensation — certainly not at Scotiabank.

“We don’t pay commissions,” says Hannam.
“Bonuses are based on a combination of our overall bank results and [the advisors’] performance. So, their bonus incentive varies according to their performance.”

Nor are there incentives to sell in-house products at credit unions, says Rolfe.

Although the credit unions manufacture and sell their own mutual funds — under the banner of Ethical Funds Co., of which Rolfe is also president and CEO — compensation is based on objectivity, says Rolfe:
“Whatever the rep thinks the client needs to meet his or her financial needs, that’s the recommendation that advisor makes.”

This reflects an overall practice among banks and credit unions to avoid the appearance of pushing anything on clients that isn’t in their best interests. “We try to keep that pretty clean,” says Anne Lockie, head of sales for personal and business clients at RBC Financial Group in Toronto.

Royal Bank of Canada compensation, says Lockie, is a mixed bag of salary and incentives based on new and retained sales, customer satisfaction and “teamwork.” The last, she says, refers to the “proportion in terms of personal contribution to the branch overall.”

Royal Bank’s rating for compensation increased slightly this year to 7.2 from 6.5 last year. Ironically, most of the comments gathered by our research team indicate that compensation is among the worst aspects of working at Royal Bank. The compensation package has been in decline over the past couple of years, says a Saskatchewan account manager. Others from Manitoba and Ontario concur.

National Bank of Canada also increased its rating this year — to 7.3 from 6.9 — taking first place in the compensation-rating race.

On the whole, compensation ratings accord with the overall ratings this year. The exception appears to be National Bank, which came first in compensation, but third last in the overall ratings. IE