Nationwide-sponsored Study Finds Reduction in Clients per Advisor
A notable feature of investment services in financial institutions is the large number of clients served by each financial professional, compared to the client books of wirehouse or RIAs. The deposit territory model in banks and credit unions has resulted in financial professionals adding clients from branch referrals year after year, many of them with small accounts, including annuities.
Kehrer Bielan research has demonstrated that by shrinking the number of clients they serve, bank-based financial professionals are able to increase client penetration, acquire more assets, and boost revenue. The professionals who serve 200 to 300 clients produced almost $40,000 in annual revenue more than would be expected given their deposit territories, assets, and tenure.
Bank-owned broker dealers have been working with their financial professionals to try to trim their books, divesting less profitable clients to investment call centers or digital advice platforms, so that they can focus on deepening relationships with wealthier clients. But in recent years, those efforts have not borne fruit.
According to the annual Kehrer Bielan Bank Broker Dealer Study, the average number of clients served by financial professionals in the bank-owned broker dealers ticked up every year from 454 in 2016 to 584 clients per financial professional in 2019, an increase of 29% over three years.
But this year’s study found that the efforts to focus financial professionals in bank BDs on fewer, better clients was now beginning to take hold. The typical bank BD financial professional serviced 528 clients in 2020, a 10% improvement over the previous year.
Kehrer Bielan has conducted the annual Bank Broker Dealer Study since 2014. This year’s study encompassed 23 bank-owned broker dealers that collectively employ 3,192 financial professionals. Nationwide is a co-sponsor of this year’s study.
By focusing on fewer clients, financial professionals can meet more of their clients’ financial planning needs, which includes supplementing the accounts with products that provide guaranteed or stable income and insure against health and market risks.
To further support this, Nationwide created a Fintech team that serves as a help desk to educate financial professionals on how to incorporate Nationwide`s wide range of offerings, specifically annuities, into their firm’s platform of choice, such as MoneyGuide or eMoney. This allows the financial professional to fully leverage the tool in order to have a more holistic planning conversation and enhance business practices.
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