07.17.24
Yield-Hungry Wealth Management Clients Becoming a Headache for Big Banks
by: Telis Demos
Banks with large wealth-management businesses are paying higher rates to hang on to brokerage customers’ cash that is not invested in things like stocks and bonds. Wells Fargo and Morgan Stanley called out increases in some of the rates they pay on certain brokerage account deposit products in their second-quarter earnings reports, and Bank of America noted a rise in rates paid on wealth-management deposits. Since interest rates began rising in 2022, banks have had to figure out ways to slow the loss of low-cost deposits to things like high-yield online savings accounts, certificates of deposit and money market funds. This shift has been a major factor squeezing banks’ net interest earnings.
Read the full article on The Wall Street Journal