Throughout my career in the financial services industry — one that now spans some four decades — I've been strongly advising clients, friends and family members the safest place to keep their money is the bank, and this year has been no different, even though I've gotten a few incredulous looks upon making that suggestion. Although numerous statistics and daily media reports indicate we are in the midst of a recession not seen since the early 1980s, the overall condition of the banking industry in our country is quite safe and sound. More than 98 percent of banks and savings institutions in the United States fall under the category of well-capitalized.
I also talk to that same group of clients, friends and family members about the importance of keeping in regular contact with that bank and the individual handling their financial affairs. There are several ways to do that in today's rapidly changing world outside traditional personal visits to the bank's physical location and phone calls, which I still encourage if that works in one's schedule. One can go online to conduct various kinds of transactions and manage/view account activity, correspond with their direct contact at the bank through e-mail and learn much more about the bank, including staff, services and news through the company website.
Just as it requires additional effort to go to the gym to engage in a new exercise routine or go on a diet to lose a certain amount of weight, it requires some additional effort to maintain a relationship with your bank and banker. I can honestly say a majority of my colleagues value this initiative greatly and reciprocate. Having regular communication with your banker/bank during a time of economic uncertainty should help bring you peace of mind about where you are holding your assets, further solidify that relationship with your bank and banker over time (and that is always a good thing), and perhaps even grow your original investment.
And because this is a particularly trying economic time, it might pay dividends if you get closer to your banker. Here are some suggestions worth considering:
Schedule a quarterly visit with your banker to review your account balance and discuss projections during that period. Have a frank discussion with your banker about where you are most at risk. How can you lessen or reduce those risky areas?
Make a monthly social visit with your banker where no business discussion is necessary. You can talk about a wide range of subjects (family, hobby, trips, etc.). By showing your warm and fuzzy side, your banker really will get to know you and tend to respond quickly in case of a jam.
Have a thorough review of the bank's different products and services, particularly those pertaining to online offerings, as those have proven over the past decade to be an efficient and secure way of handling one's personal banking. Are you utilizing all of the best products and services based on your particular needs?
Find out what the bank's current rates are and what are all the steps involved in building a line of credit with that particular institution. Ask your banker if you need to change terms such as a larger line if payments to you are slower.
Learn about the bank's overall fiscal health. You should be able to get this information from a variety of sources. As an initial starting point, attempt to obtain this from your direct point of contact. Also visit www.fdic.gov.
Knowing your banker isn't a guarantee that a financial problem will evaporate. However, if a problem does arise, you are far more likely to have a more attentive, understanding ear if the banker knows you and, more importantly, understands your business.
Lauch McKinnon is president and CEO of Atlanta-based RockBridge Commercial Bank (www.rockbridgebank.com), a de novo bank, now in its third year of operation, that targets the financial needs of commercial clients and business owners. The bank offers growing companies a unique mix of personalized, consultative services and the use of proven, state-of-the-art technologies. Contact Lauch at 404/250-8611 or [email protected].