05.02.18
Candid Conversations with Mike Miroballi: Part 1
by: David Macchia
This is part one of our Candid Conversations interview series with Mike Miroballi of The Huntington Investment Company.
After many years building a successful operation at BMO Harris, Mike Miroballi recently transitioned to his current role as president at The Huntington Investment Company. His approach to financial advisory and program building is all about focusing on the client and mutually beneficial goals, and this combination has produced excellent results for his companies. Here, he talks about his roots in customer service (which includes working at his father’s shoe store as a teen), to cutting his teeth at Merril Lynch and eventually building his own advisor programs.
On learning the basics of customer service
David Macchia: Let’s begin the journey that ultimately led you into financial services. Where did you grow up?
Mike Miroballi: I grew up in the south suburbs of Chicago, and have lived here my entire life.
Macchia: Big family?
Miroballi: Yes. I'm the youngest of five boys, so a big Italian family, all brothers, no sisters.
Macchia: I can very much relate to the big Italian family thing. How about first jobs?
Miroballi: My dad was self-employed. He had retail footwear shops, so I started working at a pretty young age, probably at 11, 12 years old, working in the stores doing stock work and things like that. I eventually did sales and all the other good stuff to maintain a retail shop.. It really taught me a lot of discipline, hard work, having accountability for getting to work, being productive and taking care of people — servicing people. It was a good foundation for me.
Macchia: I can imagine. And that kind of work, especially at a young age, teaches you a lot about dealing with the general public and the social skills that carry on for the rest of your life.
Miroballi: Yes, for sure. They absolutely did.
Macchia: And sales skills too, because it sounds like there was an element of selling as well. Moving a bit ahead, where did you go to college? Where did you go to college?
Miroballi: I went to Northern Illinois University, which is about an hour and a half west of Chicago in a place called DeKalb, Illinois. I studied finance. I was very much business focused when going to college. My first job getting out of college was with Merrill Lynch. I broke in as a financial consultant trainee with Merrill, which had just an incredible branch training program at the time. Ultimately, after passing the exams, we went to their facility in Princeton, New Jersey, and there, we had three weeks of intensive training. So I really cut my teeth with Merrill Lynch.
Macchia: How long did you remain with Merrill?
Miroballi: I was with Merrill a little less than five years. I learned a lot about the business; I enjoyed the business, but it was hard. Coming out of college and being in financial services when you're literally cold-calling all the time — practically calling a list of names out of a phone book in order to try to build a book of business. I call those the character-building years.
Macchia: Well, yes, that's where you learn how to deal with rejection, for sure.
Miroballi: If you can't withstand that, it's really hard to survive in the business. Particularly back then, before you had the bank programs, which had not yet emerged.
On working with and developing advisors
Macchia: In your career, you’ve really walked the walk in that difficult sales environment, dealing with the public, prospecting, closing deals, etc. I imagine that's helped you understand the salespeople you supervised later in your career.
Miroballi: Yes, and I think what I learned in being an advisor, not only in the wirehouse channel, but in the bank channel — I also spent five years as an advisor with Citi — is that I really can relate to what keeps an advisor up at night. When you hear about how things get pushed down from the head office, how you interpret it when you sit in the same chair every day, it gives you a little more perspective for when you're making decisions and then communicating those decisions to the larger organization. Providing the transparency and explaining not only what’s happening, but also why, that leads to greater acceptance and adoption of the direction we're setting.
Macchia: I imagine, all things being equal, a greater level of respect coming from the field, looking upward. Has the sales experience made you, in general, a better listener to advisors?
Miroballi: Yes, I think so. When I talk about business with advisors, they can see that I do understand what it's like to be an advisor and serve clients directly. I have an interest in hearing what their experience is and how decisions we make impact them because, at the end of the day, they're the ones who are serving our clients. Without the relationship that they build with their clients, we don't have a business. Being able to hear from them how decisions we're making or things that we're considering will impact how they deliver services, that's really important information. To ignore that, or not be interested in that, you're missing a big part of making critical decisions.
Macchia: Right. Knowing advisors as well as you do for as long as you have, how have you seen the quality of the financial advisor in the bank environment change over the years?
Miroballi: It's changed significantly. We’ve raised the bar quite a bit and raised the expectations. The ability to differentiate a program, and the ability for an advisor to differentiate themselves has gone up significantly. If you're not offering an experience that's rooted in financial planning, it's very hard to demonstrate any type of value-add to the client because we live in an age now where information is readily available. There's a lot more choice and almost too much information out there. The job of the advisor? It used to be just to give advice; now it's more about helping to empower your customer through giving quality advice, along with being able to educate them on how they can — based on what they've told the advisor about themselves — benefit from that advice. When you think about financial planning, it’s really about discovery. It's getting to know your customer at a very deep level and then being able to provide solutions that are appropriate. 20 years ago, it was very much solution driven versus relationship driven. You were looking at products and positioning those products and not necessarily thinking holistically about what you're trying to do for the client. I mean, you did at some level, but not to the level we do now. For the advisor to be proficient at this, they really have to up their game.
Macchia: That makes sense. In that context, how do you view the challenge of recruiting new advisors? Do you see it becoming easier or harder in the future?
Miroballi: Oh, it's been hard, and I don't think it's going to get any easier. We've definitely gone through this stretch of seeing the commodity of the advisor, the supply, being much less than it has been in the past. We all know the demographic shifts, and that advisors are getting older. We're not seeing as many young people coming into the industry, but I believe that will change eventually. When I look out over the next five years — I mean, it's hard to say where we're going to be in 10 or 20 years, but 5 years, I think, you get a pretty good sense. It’s still going to be challenging because we have a lot of different competitors within our space. You have the RIA channel. You have bank programs. The wirehouse programs really aren’t what they used to be. Not much different today than the bank programs, but you have the very large wealth-management firms, and then you've got a lot of boutique firms, as well. The competition is at a very high level, yet we're not seeing the inflow of new people into our business.
I think that's going to change, and banks are well positioned to be able to help usher that change, because you have individuals who might be inclined towards the investment world but don't necessarily fully understand it or are prepared to move into that level of customer interaction. Being within a bank environment, people can get a sense of what that's like by working with a financial advisor, being able to get the appropriate licensing and then starting to get some experience through joint appointments, etc. There's an opportunity for banks to be able to bring somebody from a bank role and eventually move them over to an investor role.
Macchia: Agreed. Over the course of my career, I've observed most often that when advisors move from a wire or independent status to a bank program, it's typically because they faced the same problem that 90 percent of independent advisors face, which is generating that next client to talk with.
Miroballi: Yes.
On partnering with the bank side of the business
Macchia: What are you doing at Huntington to improve the penetration of the bank customer base to be able to create more qualified leads for the financial advisor, more at-bats and, ultimately, more business? How do you attack that problem?
Miroballi: It starts with great partnerships and to get that, you have to eliminate the barriers that can exist between a bank customer becoming both a bank and wealth management customer. So, first of all, the organization's got to believe in it, and there's plenty of evidence out there that customers who have bank accounts, as well as time deposits and investments, bring more money. They have more assets with the bank, and they're more profitable than those that don't have an investment account. We see it in our own book of business when we do the analytics, and there's plenty of industry information to back that up. The organization's got to understand that and believe it, and then create the alignment that builds the bridge between the bank offering just bank products and the bank offing bank products and investments.
And that means having a mutual goal. That means the advisors have goals to be able to make introductions to the bank, as well as the bank having goals to make introductions to the advisors, and mutually owning those goals. That creates the environment, the ecosystem that promotes the cross-sell opportunities — the referral opportunities that could emerge from having broader discussions. The other thing that's really helped is having training on both sides in terms of what the value proposition is: focusing on the customer. Let's not think about products. Let's think about the customer and getting to know the customer better. Huntington's doing a fantastic job of taking that forward and making the bankers focus not only on what the customer might have come into that branch with but also asking some three or four key questions that get to the heart of knowing that customer much better, and potentially uncovering opportunities to be able to better serve that customer through other lines of business. The training to support this has been critical, and we're seeing the results at Huntington already. I've been here a year now, and I can see what that alignment does. Then it's up to the advisor and the investment group to execute.
Macchia: Makes sense. It sounds like you're building a well-conceived foundation to launch future growth, so congratulations on that.
Miroballi: Thank you. We're excited about the future.
Look for part two of Mike Miroballi’s interview in the May 10 issue of Portfolio Weekly.