The Life of a Misunderstood - Or also: Why does the consultant keep trying to sell me Deka?
TL;Dr
Even the bank advisor has his little bag to carry. There are such and such. I would like to accuse the fewest of malice or greed. But why does a savings bank employee constantly sell Deka? Is he only after the money? No! Or is he? In the end, savings bank employees are not so evil after all.
Introduction
2. what does a bank clerk actually do?
a. What kind of consulting is involved?
b. Which customers are there?
3. training
4. daily work
5. commissions
6. bank consultants and their funds
7. salary
8. conclusion
Introduction:
Lately, and especially since I've been hanging out on Getquin, I keep hearing/reading various fairy tales about the "bank advisor" and his nasty and unfair advice.
I myself am a trained banker (savings bank) and still work in a bank. Although in the meantime without direct customer contact.
I would like to share with you with this contribution the view of a "bank consultant" or present the general job description. Because even if this profession is very often demonized, it is not so negative per se.
Why am I doing all this? I believe that the profession of banker is quite misunderstood and this impression is (rightly) reinforced by negative press and dubious ship fund sales for pensioners. Nevertheless, this is of course not all and varies from bank to bank.
So my report refers to a small to medium-sized savings bank (about 600 employees) and these experiences are (for the sake of fairness) already about 7 years old. However, I still have contacts, so that I still get to know quite a bit.
I would like to note that I share here my personal experience and these refer to a normal "counter Futzi", as it could be a 55 year old Klaus Müller from the savings bank Klein-Kleckersdorf (from now on called banker). Not to investment bankers, executive committees or stock exchange gurus. Just as little on loan sharks or key account managers.
Therefore, I will not (can not) give any links or sources here.
What does a banker actually do?
The profession of a banker is of course extremely versatile. Well, can be extremely versatile. Of course, it depends on where and how you work, whether you specialize or not and, of course, which bank you work for.
Here I would like to focus on the counter advisor and therefore I will only describe his daily routine. Many other departments (credit department, securities department, asset and corporate advisory, administration, etc. are excluded here).
a.) Which consultations?
In general, the task of the above-mentioned bank clerk is to advise private customers of all kinds.
This starts with opening (savings) accounts at birth, through savings plans, fixed investments, insurance, funds, shares, building society savings and loans, to financial advice in the event of death. In addition, of course, there is the daily counter traffic: Helping pensioners with the withdrawal at the ATM, filling out transfers for pensioners, clarifying problems why a card was withdrawn or does not work; receiving and forwarding documents, letters, etc..
In the case of savings banks, even confirming that a pensioner is still alive and can continue to draw a pension, that Lieschen Müller is actually blind, and also confirming that Kevin Maier's signature to open the Scalable securities account is really Kevin Maier's (Post-Ident).
Of course, advice on all aspects of financial life is also part of the service. Children, young people, adults, pensioners. They all have different requirements and wishes and should come regularly (at least once a year, ideally more often) for a personal consultation. Important "dates" in life are of course also discussed.
Powers of attorney for the 18th birthday or for the wedding, financing of the first property, the driver's license or the first car, etc.
Ideally, one would like to accompany the person from birth to death as a bank. That succeeds in the today's time naturally ever more difficultly, in former times the first bank was quasi the house bank for ever. Of course, this also depends on the respective business policy. Unfortunately, this idea is being strongly suppressed by today's pricing policy and the price pressure of the competition and FIN-Techs.
In summary, one can say that a bank advisor should/must be able to advise every customer, whether rich or poor, from birth to death in all matters. This applies not only to financial matters but also to taxes, laws and, of course, insurance.
b.) Type of customers
It starts with the average citizen with an average income and then goes in two directions: Once into the "higher clientele" with wealthier (and unfortunately often more conceited) customers and once into the opposite direction. Whereby this opposite direction not only affects poorer people (e.g. those who earn the minimum wage and live from hand to mouth), but also refugees who absolutely need an account, homeless people who somehow try to get back on their feet, notorious liars who have umpteen different garnishments on their account and of course also the insolvent ex-managers who act as if they were DAX executives and yet get no money because nothing more is included in the garnishment allowance. At the same time, however, also the more or less innocent garnishment customers who are super nice and sweet, actually have enough money to live on but are restricted by garnishments that have not yet been decided by the courts.
Of course, it is important to mention that there is a wide variety of people on all sides and nothing can be generalized there. In every direction there are friendly and unfriendly people, courteous and conceited people and everyone has to bear his own fate. Not all (German) teachers are know-it-alls and not all CEOs are conceited ignoramuses. ;)
3. education
I would like to outline the training only briefly and roughly.
I would like to make one more important remark beforehand: I am referring here to my training at the Sparkasse, which I started in 2009. In the meantime, some things may be different, but the framework is still correct.
The training at a Volksbank is very similar, but the training at private banks (such as Commerzbank, Deutsche Bank, etc.) varies in part (also qualitatively) very much).
The training originally consisted of 3 apprenticeship years. You needed a Realschulabschluss. The apprenticeship period could be shortened to 2.5 years if you were particularly good and had a high school diploma.
Now the apprenticeship is generally 2.5 years, Abitur is desired, but a good Realschulabschluss is also enough.
During the apprenticeship, you go through every department at the bank. And really every department. Branches, as well as internal departments: Securities department, marketing, credit department, legal department, accounting and controlling, cash desk and mail room, even the customer service center (call center). You also visit different branches for 2 to 12 weeks at a time. As a result, the training is of a very high quality and wide-ranging. Of course, you are not a specialist in any particular field, but you can theoretically start in any department after the training. And that in every bank. In addition to this practice, of course, you also have vocational school (either 2 days every week or in block instruction). In the case of savings banks and credit unions, there are also in-house classes at irregular intervals. There, not only the knowledge from the vocational school is supplemented and deepened (including exams), but you also have rhetoric courses or conflict management courses, etc.
In addition, at savings banks there is another qualification that is acquired "automatically" (at least at my savings bank). At the end of the training, you have a 4-week final course that takes place at savings bank academies. The final test (written and oral) is relatively similar to that of a bank clerk. Afterwards, one is a savings bank clerk.
According to my personal experience, as well as the reports of trainees from other banks and teachers, the training at savings banks and Volksbanks are the best you can do (in terms of bank clerk). You learn extremely broadly and are super prepared for the working world, not just bank-specific.
The training at a private bank is (or was at the time) not as detailed and broad but more branch-based. In-house instruction also doesn't (or didn't) take place there in such a pronounced form.
Would I do an apprenticeship at a savings bank/bank again today?
Yes and no! Yes, because the training prepared me very well for the working world and I learned not only bank-specific things, but also important things for life. Appearance, rhetoric, law, financial contexts, etc.
No, because with banking you are very limited. A bank is a bank. It's a nice profession and you can specialize, but most of the time you stay with the bank. For example, it is difficult to get into industrial companies because they usually prefer industrial clerks and you simply have more choice in industry.
In general, however, to come back to the initial question: Training as a bank clerk is only possible at a savings bank.
4. everyday working life
The daily picture is very different and there are probably an infinite number of variations of the daily work. One could probably fill entire books with stories and anecdotes. If anyone is interested in a few different daily routines of a banker in the branch business, feel free to leave a comment and I can write something more about it.
Overall, it's fair to say that, like anywhere else, you can be lucky or unlucky when it comes to day-to-day customer business. There are calm days and nice customers and stressful days with unfriendly customers. Sad, desperate, angry customers go hand in hand with happy, cheerful and euphoric customers.
Everyone wants something different and they all need to be advised comprehensively and, of course, the person and their state of mind must also be taken into account. Not only when advising them, but also when they're just at the ATM or want to drop something off.
So the daily routine is very varied (depending on the branch) and therefore never gets boring (unless it's summer vacation and the World Cup).
5. commissions and the connection with consulting
This part probably interests most people.
Again, I'm only talking about my employer at the time. This can and is different at other banks. Overall, however, employees of savings banks and credit unions are under less pressure to perform than their colleagues at private banks.
Generally speaking, every bank has targets to be met by the end of the year. These are sometimes more ambitious and sometimes more relaxed. There are targets for each department and branch. Most of the time, the overall house target is approved by the board. This overall target is then passed on to the branch managers, who in turn are responsible for several branches. These then divide it up among the branches (depending on size and/or customer volume). The branch managers there then divide the targets among the employees or keep it as the overall branch target.
These targets have nothing to do with commissions for the time being!
Commissions in general: What is that actually?
Of course, the Sparkasse has contracts with other companies (or subsidiaries). These include, for example, DekaBank (as fund manager) or SV Sparkassenversicherung, but also many others on the subject of loans or insurance.
If a customer now concludes a fund, for example, the savings bank and thus the employee receives a commission. If a customer takes out a loan with residual debt risk insurance, the savings bank and thus the employee receives a commission.
These commissions are of course different and can therefore influence the decision of the consultant which product he wants to sell or not.
A big difference between bank advisors and freelance financial advisors is that bank employees have a basic salary with which they can live relatively well even without any commission.
Freelance financial advisors, however, live exclusively on commissions or their base salary is so low that it is not possible without commission. Therefore, the problem of influenced advice is much more profound there than with bankers.
But now to my savings bank:
As mentioned above, bank advisors do not necessarily rely on commission. At the same time, the target and commission payment at savings banks and credit unions is generally not as high as at private banks (according to my experience at that time).
The individual commission payment was already abolished at the beginning of my training in 2009.
The commission was then only distributed to the branch and it was up to the branch manager which employee got how much, if at all.
A short time later, however, this commission for the branch was also abolished. Thus the commissions ran only into the total house. You didn't get any more commission. Only a topped up salary (more on this under the point salary). So you didn't know how much commission this or that product delivered, and even if you had known, it didn't matter, because it went to the overall house anyway and you got a fixed amount as an additional payment, no matter how much commission you had earned yourself).
This actually had the desired effect. Consultations were more neutral because it was no longer about the commission. I no longer had to push a building savings contract on anyone who didn't want/need it. Nor did I have to sell stock funds or insurance.
From then on, it was a lot more fun. You could advise customers and respond 100% to their needs.
If I had determined that a building savings contract was really the perfect product for the customer, then of course I could try to persuade him. But I could do that because I was 100% convinced that it was for the customer, not because I would then get more commission. And if the customer still didn't want it, then that was just his bad luck. I couldn't care less.
At that time it was different with private banks (and sometimes also with other savings banks/volksbanken). I know, for example, that some consultants had the goal of selling 30 loans per month. No matter to whom and how high. If that was achieved, there was a 100% salary on top. But the basic salary was also measly small. The pressure was great, of course, and customers got loans without a great credit check or even sometimes, although they might not have needed a loan at all.
All for the commission. Thus it went/goes also advisors, whom one from the news knows.
78 jähriger was sold a closed ship fund. 97 jährigem was sold building society contract (which does not have to be stupid by the way at all, keyword inheritance). But there something was sold evenly, because one got commission.
Such consulting techniques still exist today. Therefore there is now always the cost information before conclusion of a business. This is not only available for shares, but for all forms of investment.
6 Bank advisors and their funds
Now we come to the most important point and the actual reason why I started this topic.
People like to ride around on actively managed funds.
"Get out of there now!", "What a load of crap!", "You're paying money unnecessarily!", are just a few of the statements that you regularly hear about this.
I would like to go into this in more detail, because I believe that there is a lot of prejudice here.
First of all: As described above, at least the training at the Sparkasse is very versatile. Among other things, you visit the securities department, where you are of course confronted with various Deka products. There we already have reason 1 for selling Deka products. First of all, a bank consultant only knows his own products.
A look into the securities account (partner: SBroker) is rather rare. Today probably nevertheless more than in former times, since simply the general interest in stock exchange is generally larger. However, a trip to Deka or SBroker directly does not take place either way. The securities department takes over more the administrative part and forwards documents.
Back to the advisor: if a customer comes and wants to go into the stock market, then there are already initial restrictions on the part of the bank. Not every advisor is allowed to advise on stocks. This requires special training. If no "stock advisor" is present at the moment, then another appointment has to be made. Then there is the next restriction on the part of the bank. The customer must be informed. If this has no experience at the stock exchange first a Dekaprodukt with less than 100% share portion is recommended to this. This is for the security of the customer, because just because a customer claims he can sleep with temporary loss, does not mean that he can. From experience I can say: Even with 50% of shares it can happen that the customer storms furiously into the branch and lets fall the ugliest expressions, because he did not count on the fact that his product can be times 5% in the minus.
Of course, a customer can open a securities account at any time upon express request and trade without advice. But you can see enough on Instagram or here on Getquin that there are enough people who say they can and can not.
So reason 2 is limitations of education/training. We must not forget here that the advisor advises the customer and in case of doubt must stand up for nonsense. Reason 3 are restrictions of the bank, which says, for example, that you do not want a customer who has no experience to invest directly in 100% shares (by the way, this is why the advisory protocol was introduced).
Why do people also like to recommend Deka? With Deka, you have a partner who you can contact if you have questions, who can help you and who does this better than support at TR or SC. At the same time, Deka offers enough products that allow a shallow entry into the world of shares. Even through funds that do not consist of 100% of shares, but perhaps only 30% or 50% or whatever.
Reason 4 can therefore be to first introduce the customer to the market. To give him the opportunity to gain experience and perhaps also to get to know himself better, how much loss (or profit) he can or wants to endure.
Reason 5 is that one can say to the customer: Watch out, there are people sitting there, they are experts, they know about stocks and they make sure that you sell the stocks in time, if possible, while you are there early to participate in the rising prices. You yourself do not have to worry about anything. But of course there is a small fee.
This is much simpler than, for example, with an ETF to say: it runs fully automatically and follows an index where the and the shares are deposited and which is then adjusted by the issuing company so and so often.
Of course, that is a very simplified statement. Overall, however, one must not forget that there are people sitting there, some of whom have no experience whatsoever and who absolutely want to invest in shares.
Ultimately, it is as follows: If the customer invests in shares on his own responsibility (independently without advice) via SBroker, then he will, if it goes wrong at the end always say: "Yes but the savings bank has not warned me, they knew that I have no idea. They should have convinced me that...".
Let's summarize again:
Reason 1: Advisor only knows his own products (here: Deka).
Reason 2: No special training in the area of shares/securities.
Reason 3: (Security) regulations of the bank (which are lower if there is less share (=DekaFonds))
Reason 4: Consultant is aware that the customer might not understand the stock market and wants to introduce him slowly at first for safety's sake.
Reason 5: The customer should first learn to deal with fluctuations and understand what is going on.
Of course there is also the reason of the commission with some banks or free financial advisors. I would not like to deny that at all. Also, there are of course among the consultants themselves those who are so convinced of shares that they recommend them to the customer, although it does not fit. So you could say that there are black sheep everywhere.
I also make no claim to completeness or unconditional correctness of the reasons. It is simply meant to show why a savings bank advisor actually likes Deka so much.
In addition, I must also say: My fund, which I had concluded in 2009 was despite higher fees after 13 years in total almost the same level as a MSCI World with the same deposit (in each case taking into account all fees). The difference was in total 300€ in favor of MSCI World, but the DekaFonds even beat the MSCI World in some years in performance.
So, on the whole, the advisors (whom I know and have met) mean well. And my way as well as the way of many others would perhaps not have gone to the evil, if one had not entered slowly via Deka.
7. salary
Just a brief digression on this, because it may not be so well known.
A bank consultant sometimes earns more and sometimes less. Like everywhere. Private banks like Commerzbank and Deutsche Bank like to pay more. Volksbanks and savings banks are affiliated to the public tariff and unfortunately you can't make big leaps with the salary. Not even as a branch manager. Of course, there are differences depending on the city/region. However, those who earn excessively well at savings banks are the management board members.
Well, but I would just like to present a few figures. Again, I'm talking about an employee in a branch who does typical consulting, occasionally also counter work, and has no particular specialization.
When I finished training at the beginning of 2012, an employee as described above earned about 2400€ gross (directly after training). The salaries increase automatically (public service, no civil servants!).
A branch manager earned about 2900 gross at that time. For employee responsibility and "showing up at local festivals outside of working hours" not exactly a lot.
After 15 years (!) without salary negotiation I could have earned 3200€ gross as a normal consultant. And that's where it ends. Of course, 3200€ gross is not little, but big jumps are not possible, because these 15 years have to be worked off first. By the way, the branch manager gets approx. 4200€ gross after 15 years.
In total, we received up to 14 salaries at that time. 12 fixed monthly salaries, one fixed Christmas bonus (= 1 salary) and the 14th salary was made up of up to 0.5 salary for employee performance (decided by the direct supervisor) and another 0.5 salary if the overall house target was reached (commissions).
By the way, the salary table is publicly available. Just google TVÖD-S.
8. conclusion
So why all this text? My aim is to show what everyday life can look like, what lies behind the training and how it relates to commissions. As I said, the issue of commission varies from bank to bank. At my bank and many other savings banks and credit unions, however, it was and still is as I described. Private banks could deviate from this, I do not know.
Especially the point regarding DekaFonds seemed important to me. Yes, they are more expensive but depending on the term and time of sale, despite higher fees not necessarily worse than an ETF. Deka now also offers ETFs. That was not yet available at the time.
Finally, I would like to emphasize that I am not trying to sing the praises of Deka. Nor on any bank advisors. But I can say from my own experience that many bank advisors do not know any better (due to lack of training) or that it is simply the better way for the customer to get started if they buy Deka products.
Conclusion
As described above, I could probably write a whole essay about each point. Stories, justifications, backgrounds. But of course that would go beyond the scope of this article. The text has become much longer than planned anyway.
If someone wants to know something more detailed, please ask in the comments.
Thanks for reading.
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