Feedback Loop

Several community advisory boards guide a growing Pennsylvania community bank

By Judith Sears

Community banks, as a whole, are really close to and knowledgeable about the communities they serve. But Ted Peters, chairman and CEO of Bryn Mawr Trust Co. in Bryn Mawr, Pa., believes that purposeful and efficient use of community advisory boards is a good way to make doubly sure that’s true for his community bank. That’s why the bank formally operates four separate community advisory boards.

Many community banks use advisory boards to obtain early, invaluable feedback on their community initiatives and bank operations, including their product and service lines. Peters, who has worked with community advisory boards for more than 25 years at three different banks, sees two useful purposes to use advisory boards for the $2 billion-asset, geographically expanding Bryn Mawr Trust: 1) community feedback and 2) new business development.

“The feedback we get on what’s happening in the community is invaluable, and we’ve broadened our client base and gained business,” Peters says.

Bryn Mawr Trust ($2 billion in corporate assets, $7 billion assets under management), currently operates four community advisory boards. Two of the boards—one serving the Bryn Mawr, Pa., marketplace and one serving a nearby Delaware County—focus exclusively on wealth management products and services. The other two advisory boards guide Bryn Mawr Trust’s business activities generally and were created along geographic boundaries of specific markets, one in Chester County, Pa., and one in Delaware County, Pa.

Maintaining multiple advisory boards is indispensable, according to Peters, in helping Bryn Mawr Trust respond effectively to specific product demands and concerns and to various (and sometimes competing) local interests. “Counties and towns can be parochial,” he says, adding that one advisory board covering Bryn Mawr Trust’s large marketplace would be too homogenous and remote to provide the detailed, local perspective that the community bank seeks.

Critical response

Peters has no doubt that Bryn Mawr Trust has gained significant business advantages from its four advisory boards composed of various local business and community leaders. For example, as a result of the bank’s advisory board input, Bryn Mawr Trust recently has focused more on marketing its ability to hold endowments in a special entity, which its Delaware subsidiary can manage and take custody of. “The advisory board also identified some unique features of [Bryn Mawr Trust] that could be highlighted to make us more competitive,” says Frank Leto, who leads Bryn Mawr Trust’s wealth management boards as the bank’s executive vice president and general counsel.

Another “win” was the advisory board’s suggestion to reorganize Bryn Mawr Trust’s private banking function. These functions had been spread out among lending, deposits and wealth. The bank put them under one umbrella, formally called the Private Banking Group, and made it part of its wealth management services. This move, Peters reports, provided better coordination of services to a select group of clients and, additionally, brought in a significant chunk of important, profitable new business.

Additionally, as a result of the wealth management advisory board’s input, Bryn Mawr Trust is exploring whether to provide a new retail investment product. “We haven’t been big in alternative investments as a vehicle, but a couple of our advisory board members are well-versed in the area and have helped educate us,” Peters says.

Sound advice

While Peters is enthusiastic about the value of advisory boards, he cautions that, like most things, what you put in is what you get out. “If you only meet a couple of times a year and some member of the bank drones on, it’s destined to be a total failure,” he warns.

The best advisory board meetings, Peters and Leto agree, are brief and interactive. Bryn Mawr Trust keeps meetings to one hour, with presentations no longer than 15 minutes. The follow-up board member question-and-answer session takes up most of the meeting.

Peters insists that Bryn Mawr Trust’s advisory board meetings adopt a business-like approach: Meetings start and end on time, and he suggests early breakfast meetings, to get board members when they’re fresh. Each advisory board gathers six times per year, a rate that’s not onerous to the participants but does allow them to make real, important contributions, Peters says. All meetings are scheduled at the beginning of the year to ensure a spot on the calendars of participants.

The makeup of Bryn Mawr Trust’s advisory boards varies, depending on their purpose. The bank’s wealth management boards are comprised of wealth management professionals, but the boards created to serve geographic areas feature a mixture of professionals, such as attorneys, real estate agents, CPAs and other professionals who meet and interact daily with lots of people.

Peters adds that Bryn Mawr Trust has had no problem attracting quality professionals to serve on its advisory boards. In fact, members who participate view it as an honor and learning experience. The bank gives its board members a $125 stipend per meeting. “It’s very common that when you see members’ updated [curriculum vitae], they’ve listed their Bryn Mawr Trust advisory board membership,” he says.

Here’s how

In setting up a community advisory board, Peters suggests beginning modestly, no more than four or five members, and then expanding as needed. “Start it small and run it that way for a while so you can see how the personalities go,” he says. He recommends that advisory boards have eight members or fewer.

Bryn Mawr Trust’s investment in its community advisory boards is relatively modest. Each advisory board has a bank coordinator, but the staff work involved is minimal: ordering food and sending invitations and reminders about meetings and events. A bank representative works up a brief presentation, but because these are usually about an ongoing initiative, it’s typically not a redundant task.

Peters is convinced that Bryn Mawr Trust’s advisory boards more than pay their way. He estimates that one advisory board meeting of seven members costs around $1,100, which includes food costs and board member stipends. That’s approximately $6,600 annually for six meetings. “All you need is one or two referrals to make that back,” he says. “They’re so inexpensive, and the benefits from a qualitative point of view are so strong that you’d be crazy not to do it.”

Judith Sears is a writer in Denver.