Personal bankers work in retail banking branches and assist customers with various needs, such as opening checking and savings accounts; obtaining mortgage and auto loans; investing in certificates of deposit (CDs), money markets and other commercial banking products; and planning for retirement or college. While investment bankers work mostly with institutional investors, personal bankers work primarily with everyday people.
Most of their customers are private citizens of the communities in which the bankers work. Personal banking typically does not pay as well as investment banking and other Wall Street careers, but it offers a significantly better work-life balance, and the hours are much more reasonable. In fact, the term "bankers' hours" was coined to describe the limited hours local bankers are perceived to spend on the job.
A typical investment bank features scores of well-heeled Ivy League graduates sitting behind their Bloomberg terminals and talking aggressively, hawking the latest deals into their headsets. The stereotype of an investment banker is an aggressive, well-educated and money-hungry youth. Most personal bankers are cut from a different cloth.
While a business degree helps, and an MBA looks even better on a personal banker's resume, a lot of local bank branches care less about educational credentials than about community reputation, networking ability and affability. These banks pride themselves on hometown service and prefer to see hometown bankers meeting and greeting new customers.
Personal banking is an ideal career for someone who loves building relationships in his local community, has a love for the markets and desires to make a solid income, but is not concerned with getting rich.
Perhaps the most standard day-to-day duty of a personal banker is helping bank customers open new checking and savings accounts. A personal banker handles new customers as well as existing customers who want to open a new account. These bankers sit at those large, L-shaped desks that run along the lobby at most retail bank branches. It's a personal banker's job to customize an account to fit the customer's needs.
The personal banker also offers ancillary products such as overdraft protection or a round-up option, a checking account feature where each debit card purchase is rounded up to the next dollar, with the excess change placed in a savings account.
Selling Investment Products
While retail banks rarely offer the aggressive investment vehicles you find on Wall Street, they do provide an array of conservative products that guarantee returns and are often insured by the Federal Deposit Insurance Corporation (FDIC). These products include CDs, money market accounts and retirement accounts such as traditional and Roth individual retirement accounts (IRAs).
Some customers know exactly how they want to invest their money, while others need some guidance to make the right choice. Still others have no clue, in which case it is the personal banker's job to ascertain the customer's needs and goals, then provide the appropriate solution.
At some banks, personal bankers are licensed to sell mortgages and other loans. Other banks employ separate mortgage specialists and the personal banker simply triages the customer and refers him to the finance expert when necessary. As a general rule, the smaller the bank, the more hats each banker wears. Personal bankers in small-town community banks may do everything from financial planning to mortgage banking.
In most cases, a personal banker only has access to his own bank's loan products, as opposed to a mortgage broker, who can place his customers with dozens of banks and lenders. This puts the personal banker at somewhat of a disadvantage, though many mortgage customers are happy to accept these limitations to deal with a local banker they know and trust.
Retirement and College Planning
Personal bankers help customers fund their retirements and their children's educations. They sell Roth IRAs, traditional IRAs and annuities for retirement planning. For college savings, personal bankers offer savings bonds and the popular 529 plan, which is a tax-deferred college account.
Once again, a personal banker often must take on an advisory role to do this part of his job successfully. Banking terminology is a foreign language to some customers, so it is up to the personal banker to help the customer understand and feel confident about where his money is being placed.
The ability to forge and maintain strong relationships within the community is by far the most important skill for a personal banker. The financial products themselves are not particularly complex and do not require an MBA or preternatural math skills to understand. This is not investment banking, where esoteric terms such as interest rate swap, credit default swap and collateralized debt obligation often come up in client conversations. Most personal banking products are straightforward, but the personal banker has to make the client comfortable enough to want to purchase them with him.
Educational requirements vary from bank to bank. Unlike law or medicine, the industry only requires a high school diploma. For those in college who are considering personal banking, a business degree, particularly with a concentration in economics or finance, is the way to go.
Pay and Hours
Personal bankers make pedestrian salaries, particularly compared to their investment banking cousins. The average yearly base salary is $37,000, according to Glassdoor. Every bank's pay structure is a little different, but almost all offer a combination of bonuses and commissions.
These extra incentives mean productive networking and client searches correlate directly to a banker's paycheck. A motivated personal banker can make more than $50,000 in total compensation his first year, and more than that after establishing a broad customer base. However, Wall Street's six-figure incomes typically elude personal bankers.
The big advantage personal bankers maintain over the Wall Street crowd is hours. Look at the hours of operation posted on the door at any local bank. They are usually pretty restrictive, such as 9 a.m. to 5 p.m. during the week. People who want to make a decent living while prioritizing family time should consider a career in personal banking.