When it comes to cross selling investment products to the affluent, banks in the United States have experienced limited success compared to Canadian banks.
According to a new Aite Group report, banks' brokerage arms have suffered from weak brand recognition in the investment world and challenging client acquisition practices through the branch channel.
Banks must also now contend with their clients' increasing preference for viewing and managing their investments online and the resulting loss of investment assets to online brokerage firms. Aite found that while many banks provide self-directed investment services, these are not on par with those of online brokerages.
By comparison, Canada's bank brokerages have largely accepted the online channel and, in general, have been more successful in cross-selling investment solutions to their mass-affluent clients than U.S. banks, according to the Aite report, which did not include credit unions.
"Banks have an opportunity to differentiate themselves in the mass-affluent space--only they can provide clients with a full set of tools for managing short-term cash needs and planning for long-term goals," said Sophie Schmitt, senior analyst with Aite and author of the report.
The Aite report is based on 2010 fourth quarter interviews with more than 20 executives across 19 of the top 100 North American banks and bank-affiliated broker/dealers.