Households that buy investments and insurance where they bank are among a retail financial institution’s most profitable and desirable customers, according to a new study.
LPL Financial LLC, a San Diego, Calif.-based independent broker-dealer, published this finding in a summary of results of a survey, “The Value of an Investment and Insurance Customer to a Bank,” which polled 4,374 households. The study draws on data from the MacroMonitor, a retail financial-services and marketing database that measures, analyzes and interprets consumer attitudes, behaviors and motivations.
The survey is conducted every other year by the Consumer Financial Decisions Group of Strategic Business Insights, formerly part of SRI International.
Households that buy investments and insurance where they bank are more likely to stay with the institution than customers with multiple banking relationships, the survey says. The report notes also that by under-investing in their investment and insurance services businesses, retail financial institutions are missing the opportunity to increase the “stickiness” of these highly desirable customers.
Among the study’s other key findings:
Consumers who have purchased an investment or insurance product from their primary bank or credit union have checking account balances that are 16% higher than those households without a brokerage or insurance relationship.
Brokerage customers have savings account balances that are on average 85% higher than non-brokerage customers; and
Brokerage and insurance customers have more than twice as many credit products and 11% more remote banking products than customers who have not purchased an investment or insurance product from their primary bank or credit union.