Results of Annual Checkup Spur Discussion of Growth Drivers


During the virtual unveiling of the 2020/2021 Annual Industry Checkup on March 11, Tim Kehrer reviewed the past several years’ worth of performance data collected from the three thousand or so banks and credit unions that offer retail investment services and came to the following conclusion: “It’s pretty obvious that as an industry we’ve been relying on increases in productivity to drive top line growth.”


The data bear that out. From 2015 to 2017, gross revenue from investment services tracked with advisor productivity and advisor headcount, the three primary metrics used to track the health of the investment advice business in financial institutions. All three measures declined slightly in 2015, before improving in 2016 to more than make up for ground lost the previous year. These firms grew top line revenue from 2017 to 2018, driven by a sharp increase in advisor productivity, while advisor headcount began to decline.



In more recent years, advisor productivity has plateaued, setting off alarm bells around the industry and causing many of us to wonder, how can we get back to growth? Peter Bielan, who has helped many banks and credit unions grow their investment advice businesses, outlined 16 areas that participating firms should focus on in 2021.


Not all items on the list are new. Some, like growing managed assets and recurring revenue, are areas that have been priorities for many years, and in which some firms have been very successful. In other areas, like meeting the insurance needs of more of their clients, “the desire has been there, but the results haven’t followed,” Bielan noted.



How should firms decide which of the 16 areas to focus on? “Pick the ones that fit your business objectives, and that you can sell within your organization,” suggested Bielan. “Saying you want to do the one over another isn’t necessarily going to give you the results. You need the resources deploy to it.”


“Firms can’t pick all 16, but they need to stake their claim to which ones they’re going to make investments in, and we believe if they do that, then their results will start to break out from the norm,” Bielan concluded.


Or, as one of the virtual participants chimed in via chat, “These are our marching orders to better performance!”

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About the Annual Industry Checkup

Since 2012 Kehrer Bielan has published its Annual Checkup to examine the health of the financial advice business in banks and credit unions. The Annual Checkup monitors the number of banks and credit unions offering investment services, the number of financial advisors serving financial institution customers, and the revenue they produce. The report covers year-over-year changes in key metrics such as advisor productivity, assets per advisor, and ROA, providing separate estimates for institutions with their own broker dealer versus those that outsource the broker dealer function to a third party.

The Annual Checkup draws on our annual survey of the third-party broker dealers that partner with banks and credit unions; our benchmarking surveys of bank BDs, credit unions, and banks that partner with third party BDs; our proprietary surveys of compensation; and industry data from the FDIC, NCUA, and other sources.