• As Goes the Financial Plan, So Go the Assets

    With implementation of the Department of Labor's fiduciary standard for qualified retirement accounts just around the corner, firms are looking to financial planning to help their advisors fulfill their responsibilities under the rule and justify the fees they charge. That was one of the central themes at Kehrer Bielan's recent study group on The New Importance of Financial Planning and Life Insurance After DoL, held last week in Chapel Hill, NC.But the planning specialists and other exe...  Read More...

  • Planning to Sell More Life Insurance?

    Advisors Who Prepare More Financial Plans Produce More Life Insurance RevenueFor decades banks and credit unions have struggled to profitably meet the life insurance needs of their clients.The DoL Fiduciary Standard rule for retirement accounts increases the need to improve life insurance sales, because firms are looking for ways to replace revenue impacted by lower fees and commissions.But selling life insurance just got even harder. Our last Highlighter provided evidence that additional compen...  Read More...

  • Paying More for Life Sales May No Longer Work

    Banks and credit unions have struggled for years to profitably meet the life insurance needs of their clients.Now, the advent of the DoL Fiduciary Standard rule for retirement accounts creates more urgency to improve life insurance sales.  Many product lines are expected to experience fee compression, and a shift to advisory business could result in a short term dip in revenue, so firms are looking for ways to fill the revenue shortfall.The situation appears to be exacerbated by the deterio...  Read More...

  • What Are Referrals Worth?

    Advisors in banks and credit unions enjoy an advantage over other providers of financial advice because they have the support of the branch network and the client referrals branch staff generate. How valuable are these referrals? The market tells us how advisors value them.Kehrer Bielan research on advisor compensation finds that at every level of production advisors based in bank or credit union branches earn a payout that is at least 5 percentage points less than other bank-based advisors who ...  Read More...

  • Banks Need to Play Catch Up on Financial Planning

    Kehrer Bielan research estimates that 11% of US households have a written financial plan, but only 10% of those financial plans were obtained from a bank or credit union. This means only 1% of US households have obtained a financial plan where they bank.Those metrics have to change if financial institutions are going to prosper as the DoL Fiduciary Standard is adopted.  As investment advice is commoditized, investment services businesses have to find ways to differentiate their offering.Why...  Read More...

  • Platform Investment Reps Under DoL

    Throwing Baby Out with the Bathwater?In the wake of the Department of Labor Rule on the Fiduciary Standard, many banks with licensed or registered client-facing banking staff are considering dropping their "platform banker programs."  These firms wonder how they will be able to implement the elements of a fiduciary standard with staff that turn over every 18 months on average, including ensuring that the investment advice offered is in the best interest of the customer, and provid...  Read More...

  • For Many Millennials, Robos Do Not Compute

    Millennials Prefer Banks, Credit Unions for AdviceThe robo Advisors have positioned themselves to attract Millennials, but new Kehrer Bielan research suggests that there may be a glitch in the robo model - Millennials think they will get better financial advice from a financial institution. Nearly half of households headed by a Millennial agree with the statement, "Banks, S&Ls and credit unions are the best source of advice regarding my savings and investments." In fact, ...  Read More...

  • What Production History is Used to Compute Advisor Compensation?

    Multiple Month Advisor Compensation Plans Outnumber Single Month Plans by More Than Two to OneAccording to new Kehrer Bielan research, Advisor incentive plans that calculate payout based on a rolling month production average account for almost seven in ten plans.  Even though monthly plans are the most common type of look-back used, the ability to smooth out grid placement through averaging multiple month occurrences are more common when not distinguishing the number of months used.As ...  Read More...

  • What the Revised FDIC Compliance Manual Could Mean for You

    Last week the FDIC issued Financial Institution Letter 29-2015, announcing the revision of its Compliance Examination Manual, the "Bible" that FDIC examiners use to evaluate financial institution compliance with federal consumer protection laws and regulations. Read the full document here.  The Manual's Section IX addresses retail sales of investment products, providing very specific guidance on the oversight and due diligence responsibilities of institutions that p...  Read More...

  • Millennials Already Focused on Retirement

    Other Concerns Reflect Life Stage PrioritiesRetirement may be decades away for most Millennials, but according to new Kehrer Bielan research they are already preparing for it. When asked to identify the most important goal for their savings and investments, more Millennial households chose "Providing for retirement" than any other priority.While retirement is top of mind for Millennial households, nearly as many Millennials chose "Buying a Home" as their top financial priority. Providi...  Read More...

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