F&I managers need intelligence, empathy -- and good training

Serum: "You need people with a lot of gifts, intelligence and also some empathy."

Today’s all-out emphasis on regulatory compliance has led to the biggest change in F&I training in recent memory, says Robert Serum, a career educator in dealership operations.

The biggest F&I hurdle, though, remains the same, he says: The need for dealerships to find the right person to head the department.

Serum retired in 2007 after 34 years at Northwood University in Midland, Mich., where he was vice president of academics. Last week, he became chancellor and adviser to the Automotive Dealership Institute, an F&I training firm in Scottsdale, Ariz.

Serum discussed the importance of dealership F&I managers and their training last week with Automotive News Special Correspondent Jim Henry.


What’s the hardest thing about being an F&I manager?

When you ask dealers, general managers, general sales managers, “What’s the biggest difficulty in the F&I area?” they typically say it’s finding people to manage the department.

It’s a very complex job, balancing the banks’ demands, compliance demands, the demands of manufacturers, the interaction with the dealership’s Web staff -- all that takes somebody with a reasonable amount of skill. You need people with a lot of gifts, intelligence and also some empathy, I think.

Has it gotten harder as time goes by?

It’s also very important because along with the changes in customer behavior -- longer loans, greater amounts borrowed -- it’s really an important dealer profit area.

What is the single biggest thing that has changed in F&I in recent years?

I believe it’s compliance, yes -- the necessity of having good rebate forms, F&I menus, making sure you comply with the Patriot Act, comply with Used Car Buying Guides. Compliance guidelines are critical in the training process.

[Editor’s note: The USA Patriot Act requires dealers to screen all consumers, prior to any sale, against the Office of Foreign Assets Control list of terrorists, drug traffickers, and money launderers, according to Reynolds and Reynolds Co. Every customer, cash or credit, must be checked against the list.]

Where’s the best place to recruit F&I managers? Should dealerships hire someone from within who knows the dealership culture, or someone with no experience, who doesn’t have bad habits to unlearn?

The trouble with in-house training is there’s a really strong tendency to train for the last 10 years -- that is, to train based on the experiences of the last 10 years -- when it’s the next 10 years that are important. Whether it’s an experienced person or an inexperienced person, I think dealers are always better off if they can go outside to places that specialize in that type of training.

Are F&I managers that you see in training experienced, inexperienced, or some of each?

Some of each, definitely.

Does training need to be in-person or can it be online?

I’m a fan of online, too. But people who physically go to those courses -- in the case of [Automotive Dealership Institute] it’s four weeks of face-to-face, but they also offer online -- my experience with the Northwood MBA program is that face-to-face is a good avenue for training. When you’re there in person, people can challenge each other. They can bounce things off each other.

There’s a lot of talk in the industry about the need for F&I managers to work with other departments. Is that a priority?

One of the things I think a good F&I training program can do is teach the F&I manager to train the other people in the dealership. It may be necessary to press the dealer, the general manager, for the time to do that.

In the past, if the word “compliance” came up, the attitude was, nobody had to know anything about it except the F&I manager.

You can reach Jim Henry at autonews@crain.com

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