Credit Unions Invest in Wealth Management: Report
The number of credit unions with investment service programs increased in 2013.
According to the KSA 2013/2014 Annual Checkup from the Charlotte, N.C.-based research firm Kehrer Saltzman & Associates, of the estimated 860 credit unions and 1,809 commercial banks that offer investment services, the number of banks in the business fell by almost 3% compared to a nearly 3% increase of credit unions that offer such programs.
Jon Gabriel, a senior associate at KSA and an author of the Annual Checkup, pointed out that the number of banks selling investments fell for the fourth time in the last five years. However, banks still dominate market share.
“Altogether 26.2% of all banks offer investment services, down slightly from 2012,” Gabriel said. “But those banks account for 78% of all consumer deposits in banks. The larger the bank the more likely it is to sell investments.”
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The number of financial advisers in financial institutions affiliated with third-party broker-dealers increased in 2013, reversing a long-term decline, said Tim Kehrer, who directs KSA's Annual TPM Survey, an annual study of the largest third-party broker-dealers.
Kehrer said 6,160 financial advisers affiliated with the largest third-party broker-dealers worked in banks and credit unions last year, up from 6,017 the previous year.
The largest banks tend to have their own broker-dealer, and employ advisers that produce more revenue, on average, said Kenneth Kehrer, a principal at KSA.
“Part of the reason for this productivity differential is that the largest banks have been more successful in transitioning to fee-based advisory business,” Kenneth Kehrer explained. “In addition, they have been more aggressive in offering incentives to attract top producing advisers.”
Advisers in banks with their own broker-dealer are leading the way, with gross revenue per adviser of $435,360, up 33% over 2012, according to KSA. Advisers in banks that work with third-party broker-dealers also enjoyed a banner year, increasing average productivity 29% to $297,028.
The Annual Checkup was sponsored by investment firm INVEST Financial Corp., in Tampa, Fla.