Survey Tracks Decline In Branch Referrals To Advisors

A recent Wall Street Journal article highlighted the impact of reduced foot traffic in bank branches, with FDIC data revealing 1,700 branch closings in the 12 months ending June 30th. As branch traffic declines and branches are closed, the opportunity to refer branch customers to the advisor in the branch shrinks.

This year’s Kehrer Bielan Bank Broker Dealer Study confirms that trend. In 2017, large banks that own their own broker dealer referred just 1% of their customer households to their financial advisors, down from 1.6% in 2016 and 1.8% in 2015.

That means that the typical advisor has fewer referrals to work with. During 2017, the fall in the share of bank branch customers referred to an advisor was mitigated somewhat by a small decline in the number of advisors, because the available referrals were spread among slightly fewer advisors, but the typical advisor received two-thirds fewer referrals than 2 years ago.

Referrals have been a core competitive advantage of the bank insurance and securities community, enabling banks and credit unions to attract and retain advisors, and provide payouts that are about 5 percentage points less than other channels. As financial institutions scramble to supplement the branch-based advisor model with other financial advice channels, they still need to prime the referral pipeline.

Midwood’s coaching and training staff can help. Working in concert Midwood’s wholesalers, the focus of this new training team is to develop and deliver generic product, sales skills and referral-based curriculum which can be customized to meet the objectives of each financial institution. Unlike a traditional wholesaling model, this salaried team can focus specifically on the bank’s needs without a product or sales bias. For more information, please contact Midwood’s National Training Director Jen Shields at:

The 2017-2018 Kehrer Bielan Bank Broker Dealer Survey covered 29 of the 32 largest bank-owned broker dealers, which collectively employ 7,861 financial advisors. This year’s survey was sponsored by Midwood Financial.