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Study: Bank, credit union advisors seeing dramatic increases in AUM

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Average total revenue generated by bank – and credit union – affiliated financial advisors hit a record high in 2013, according to new research.

BISRA discloses this finding in its annual Benchmarking Study, which analyzes the performance of the investments and life insurance programs in banks and credit unions, based on aggregated data from 2013. This year’s report contains 100 performance metrics, including new metrics to gauge the program’s success based household penetration and fee-based sales performance.

The industry average for program revenue per bank household rose 20 percent year-over-year. The research also shows that brokers in financial institutions are successfully narrowing their focus to client prospects who fit their target market, thereby generating more business opportunities.

“This allows for deeper relationships leading to greater share of wallet and access to outside assets,” says BISRA Head of Research Janet Cappelletti.

The number of bank households per rep, the report adds, shrank 33 percent since 2010. Average assets under management per broker rose 35 percent in the same period.

The report attributes the increase in assets under management in part to stock market performance. A more significant factor: “dramatic increases” in assets managed by bank and credit union channel advisors.

The report observes also that two market penetration metrics — averages for both household revenue penetration and deposit revenue penetration — attained their highest levels since the 2007-2009 recession.

Household revenue penetration measures the amount of investment and insurance program revenue generated per bank household. Deposit revenue penetration measures the amount of program revenue generated per million dollars of core retail deposits.

Investment and insurance programs contributed an average of 10 percent to financial institution non-interest income, up from 8 percent in 2012. The study expects these figures to increase as financial institutions enhance their focus on non-interest income.

Among the report’s additional findings:

  • Between trailers and managed money fees, recurring revenue accounted for one third of advisor revenue in 2013.
  • Advisor productivity increased 12 percent.
  • 10 percent of participating banks reported platform revenue exceeding $20,000 but the bottom quartile produced less than $3,800 per year.

Read the full report here.


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