Magazine article American Banker

Exec at 1st Hawaiian Follows Course Charted as Regulator

Magazine article American Banker

Exec at 1st Hawaiian Follows Course Charted as Regulator

Article excerpt

During the 11 years that he regulated financial companies in Hawaii, Robert A. Alm said he preached over and over again that consumer protection just makes good business sense.

Now, two years after stepping down as a director of the state's Department of Commerce and Consumer Affairs, he's getting a chance to prove his point.

Mr. Alm has taken a job as a senior vice president of First Hawaiian Bank - the state's second-largest bank - overseeing a new retail brokerage, a new mutual fund family, and an established personal trust business. By assuming these duties just as banks and brokers are reeling from last year's tough markets, he risks getting into the firing line of investors disappointed about returns.

"It's been tough, getting into these products just as the markets got rough," he acknowledged. "But we're learning from the ups and downs." To make sure the ups and downs don't unduly hurt his customers, Mr. Alm said he has instituted a series of rigorous controls.

For example, he said he has personally been making sure that the bank's 15 investment product sales representatives sell only investments that are suitable for their customers.

Not only is every transaction reviewed, but the sales representatives' compensation is linked to the results of follow-up calls that outside evaluators make to the reps' customers.

Furthermore, Mr. Alm said the bank is doing its level best to be an unbiased broker of advice, one that doesn't push proprietary investment products over other investment products simply to make more money. To that end, two years ago, First Hawaiian stopped employing an outside brokerage firm, GNA Corp. …

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