NU Online News Service, May 17, 2004, 6:04 p.m. EDT – Strong growth in variable annuity sales helped banks hold brokerage revenue steady in the first quarter.[@@]
But bank brokerage profits fell slightly, according to a quarterly report from the Bank Insurance & Securities Association, Wayne, Pa.
Full-time Series 7 retail investment sales representatives in banks generated average monthly gross sales commission revenues of $23,840 per rep during the first quarter. That figure is almost even with the average of $23,763 tallied in the first quarter of 2003.
At the same time, investment sales productivity of licensed bankers fell 26% between the first quarter of 2003 and the latest quarter, to an average of just $1,764.
While banks saw broad increases in revenue across most investment product categories, there was a substantial shift by investors to variable annuities, from fixed annuities. Licensed bankers’ sales fell because most licensed bankers focus on selling fixed annuities, says Kenneth Kehrer, head of the Princeton, N.J., research firm that conducted the study.
Variable annuities accounted for 23% of bank investment program revenue in the first quarter, up from 17% a year earlier.
Fixed annuities accounted for 29% of first-quarter program revenue, down from 41% in the first quarter of 2003.
In April 2002, sales of fixed annuities generated 59% of the typical bank broker-dealer’s revenue.