Insights | 07.19.18
Bank B/Ds Backslide on Reducing Advisors’ Books
Bank broker/dealers (B/Ds) have been working to reduce the number of clients served by each advisor, freeing the advisor to enhance service to the remaining clients and deepening the relationship to obtain greater wallet share of the clients’ assets. Clients removed from the advisor’s book can be assigned to a new advisor, improving the service to those clients and adding to the firm’s revenue penetration.
But according to the 2017–2018 Kehrer Bielan Bank Broker Dealer Study, last year the average number of client households served by an advisor in the bank B/Ds actually increased 7 percent, from 454 in 2016 to 484 in 2017.
Attempts to reduce the size of advisors’ books are hamstrung by the shortage of experienced advisors and the challenging recruiting environment. Bank B/Ds are working around this constraint by implementing associate advisor programs, developing investment/call centers, and introducing digital advice platforms to absorb clients transferred away from traditional across-the-desk advisors.
The Kehrer Bielan survey covered 29 of the 32 largest bank-owned broker dealers, which collectively employ 7,861 financial advisors. This year’s survey was sponsored by Midwood Financial.