Tackling the Challenge of Integrating Trust and Brokerage

Many banks and credit unions have been disappointed in the performance of the ways that they serve the wealth management needs of their clients.

  • A recent Kehrer Bielan study found that the 20 largest BISA member institutions have captured only about 7% of the investable assets of their respective customer bases.
  • Growth has been slow, with
    • Asset growth just tracking market valuations,
    • Revenue below plan in many institutions, and
    • Resulting pressure to reduce expenses to compensate for flat revenue.

But there is increasing awareness that the way banks and credit unions have structured the delivery of wealth management services, through several separate businesses, is holding back their ambitions to better penetrate their opportunity in wealth management.

We see several banks looking at ways to better integrate the delivery of wealth management services, from melding product offerings, to unifying sales forces, and rationalizing middle and back office platforms. In a recent Kehrer Bielan survey of 104 institutions, 74% reported considering or having already launched some of these integration initiatives.


The most common approach, being considered by about half the firms, is to develop an integrated customer management system, either for all of the collective wealth management businesses, or the entire banking enterprise. Another popular idea is to combine the investment services and Trust sales forces, and a third of the firms are thinking of enlisting the two sales forces to sell each other’s products, or more narrowly asking financial advisors to sell Trust-advised products alongside investment products from other asset managers. Only a fifth are considering integrating brokerage and Trust platforms, including shifting Trust and brokerage assets to an RIA platform.

Kehrer Bielan has embarked on an ambitious project to

  • Monitor these integration initiatives
  • Benchmark the personal wealth management business performance of these initiatives as well as the traditional, fragmented delivery models
  • Identify emerging best practices

If you are attending the Annual BISA Conference, come see a progress report on this project, along with a pair of case studies on alternative wealth management delivery models. If you aren’t attending BISA and want to know more, please contact ken.kehrer@kehrerbielan.com to be included in future progress reports and study group invitations:

Transformational Opportunities in Integrating Wealth Management
Thursday March 5th, 11:15-12:00
Atlantic 1

Moderator:
LeAnn Rummel, President & CEO, Cetera Financial Institutions

Panelists:
Kenneth Kehrer, Principal, Kehrer Bielan Research & Consulting

Michael Joyce, President, First Merchants Private Wealth Advisors

Michael Wilson, Executive Director, Wealth Management First Citizens Wealth Management

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