ST. LOUIS – Despite having the ability to sell securities to thepublic since 1999, some banks still have not captured significantmarket share from their full-service brokerage counterparts,according to a recently released Maritz Poll survey of individualinvestors. Of the 1,200 persons who responded to the survey, only10% claim that banks are their primary investment provider. Seventypercent of investors selected a full-service brokerage firm becauseof their range of investment capabilities while only 59% of bankcustomers chose their institution for this reason. Credit unionswere not included as one of the investment providers forrespondents. “Banks are not recognized as having the ability toprovide the same level of investment advisory services as brokeragefirms,” said Dick Pace, director of financial services research atMaritz. For banks, Maritz found several “target optimal clients”who might be open to working with multiple investment providers.Two-thirds or 35% of respondents with $250,000 or more ininvestable assets are more likely to use multiple firms to investwith, compared with 12% of investors with under $50,000. Likewise,26% of male Generation Xers ages 35 to 44 are more likely to usemultiple firms, compared with just 4% of men aged 18-24. “Whatwe're seeing is what I call heavily targeted groups – those with$250,000, $500,000 and $1 million (in investable assets) that arefought over aggressively,” said Rodger Stotz, vice president,managing consultant, Maritz. “A number of full-service brokeragefirms are targeting them.” The banks tend to go a little lower intheir targets – those with between $100,000 and $500,000 ininvestable assets, Stotz said. Male GenExers with between $5,000and $50,000 in investable assets are typically getting started,have simpler needs and may not be comfortable with or targeted bylarger broker firms, he added. The suggestions from the surveyfindings on what banks could do to increase their presence as beingmore of a choice for investors can apply to credit unions too,Stotz said. “To gain market share from investment houses, creditunions and banks need to tweak their strategy so that theiremployees are focusing less on discrete transactions and more onbuilding client relationships for the long-term,” Stotz said. “It'simperative for credit unions and banks to put a continuousimprovement process in place that focuses on being responsive toclients' needs, so that frontline employees can generate newbusiness leads and brokers can develop and maintain strongrelationships.” Because some credit unions are in the educationprocess meaning they have launched campaigns to just make theirmembers aware that they're even offering investment products andservices, a proactive approach is critical, Stotz said. “It's aneducation process for members and employees,” he offered. “Wehighly recommend that there is ongoing customer research, at leastquarterly, to provide the kind of feedback to find out what thelocal clientele needs so that there is a better understanding ofwhat is working well.” Stotz said this proactive approach couldhelp credit unions be more than just responders to members'questions about investment services but gives them the ability todiscuss how they can be unique to each person's needs. Creditunions may have an edge over banks when it comes to buildingrelationships. “What's so interesting about credit unions is theyhave a great story to tell,” Stotz said. “If they can share theirphilosophy out on what they bring to the market and move the memberexperience to the level of providing additional services, it's awin-win.” Other findings from the Maritz survey showed 93% ofrespondents said that their bank broker has earned their trustwhile 86% of those who use a bank's brokerage group said theirbroker or advisor treats customers ethically and honestly. -

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