Insights | 04.11.18
Annual Checkup: Assets Grow, but ROA Slips
Turbocharged by sharp increases in the value of assets under management, financial institutions increased their investment assets by 11.9 percent during 2017, according to the Kehrer Bielan Annual Industry Checkup.
However, the revenue on those assets actually slipped slightly from 75 basis points in 2016 to 71 basis points last year. Bank-owned broker/dealers, which are further along in transitioning to a fee-based business model, were impacted less than the banks and credit unions that partner with third-party broker/dealers.
Are we seeing the beginning of fee compression?
The higher ROA among bank broker/dealers reflects their larger share of assets in advisory products instead of transaction products, some of which pay trail commissions that are just a fraction of typical advisory fees.
Since 2012, Kehrer Bielan has published its Annual Industry Checkup
to examine the health of the financial advice business in banks and credit unions. This year’s report is based on data from 2,173 financial institutions that collectively have 12,908 financial advisors.
Download your complimentary copy of the report.