By Ketul Shah

Harsh Nayak is an engineer, who works with an IT company. Over the past three years his bank balance and investment have grown, decently. So, his bank assigned him a relationship manager.

Harsh wonders: What good will a relationship manager do for me? Like many of you, he isn't sure exactly what a relationship manager does.

A relationship manager's job profile

A relationship manager is a selling arm of the bank. He/she manages different products of the bank, and each one handles a group of customers. There are relationship managers for corporate customers as well as personal banking customer. Several banks have two categories of relationship managers for personal customers.

Here's a break-up of an RM's job profile:

- Acquire new business through the bank customer (that’s you!).
- Meet income targets set by banks regarding the sale of mutual funds  and insurance etc.
- Ensure that the right product mix of mutual fund, insurance etc is included in the total income generated.
- Handle sales channels if there are any.

How RMs make money

They are employees of the bank and hence, get a fixed salary. Apart from that, their income includes incentives or commission from the sales achieved. Incentives and commissions are linked to the sales performance of certain products as well as income generation.

So, basically the RM works for the bank to generate revenue. At the end of the day he or she has to meet his sales and revenue targets.

Do you need a relationship manager?

If you already have a financial planner or advisor you need not have a relationship manager. Your financial planner or advisor is working for you, and his prime concern is your interests.

This cannot be said of a relationship manager. An RM is first a bank employee, and then your money manager.

But this sometimes helps as well. He can make banking fast and easy for a customer. But that is the only edge relationship managers hold over your financial planner.

Dos and don'ts

Here's a short checklist, which should help you with a relationship manager:

- Go slow with a new relationship manager.

- Track all the investments for initial time.         

- Cross check the tips of relationship manager with market.

- Don’t go for any high-risk high return investment initially.

Finding Mr Right
 
The judgment can’t come overnight. This depends on the approach and suggestions given by the relationship manager. If an RM understands the preferences and requirements of the customer and offers the products accordingly then he is a good manager for you.

That’s when a relationship manager earns more for himself as well as for the bank.

On the other side, customers should not jump into big investments with a new relationship manager without experiencing his integrity, approach and experience.

Let him work hard for you and gain your trust before you entrust your hard-earned money to him.

The author is a Chartered Accountant and MBA specialized in banking, finance and insurance. Write to him at ketul.shah@moneycontrol.com

Disclaimer: The contents of the article or are for information purpose only and are in no way meant to be advisory in nature. The author does not claim responsibility for actions taken by readers on the basis of the Article. Please consult your financial advisor for your personal money management.