How advisers are leveraging the bank channel

May 27, 2014 @ 11:22 am

By Tom Daley, Founder & CEO, The Advisor Center

The Advisor Center Community: Channel Breakdown
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The Advisor Center Community: Channel Breakdown

While at the InvestmentNews Retirement Income Summit last week, our team spoke with a wide variety of advisors from all areas of the industry.

Of particular interest were some of our conversations with bank channel advisors who are leveraging financial institutions to grow their client bases. What we heard anecdotally also mirrored the numbers we are seeing here at The Advisor Center with 15% of our community of advisors reporting they are affiliated with financial institutions.

There are a number of reasons why an advisor may want to choose this business model.

Continual Pipeline of Clients

Banks are one of the only channels where referrals and leads are directly funneled to advisors. One advisor working in a small market told us 50% of her clients are bank customers. The other 50% are referrals from those bank customers. Another advisor told us he can count on always having a pipeline of potential clients at his fingertips. Without lead generation to worry about, he can focus on helping clients.

More and More Investment Options

Banks have to come realize that supporting and investing in the wealth management side of the business is a natural way to improve overall customer satisfaction and customer retention. In this light, more and more banks are providing advisors with deep investment product offerings, top technology and overall support.

Built-in Marketing and Branding

To bolster the advisory side of their business, the leading financial institutions are actively marketing their banks as a place to get financial investment advice as well as make deposits and apply for loans. In addition, an advisor can leverage the financial institution's already-recognized brand.

Opportunities for Advisors New to the Industry

We met one young advisor from a mid-size Midwestern city who had recently switched over from the institutional side of banking to begin his career as a financial advisor. With the help of a trusted mentor at his financial institution, he was pleased how quickly he had been able to establish his advisory business and was bullish on his future growth.

A Corner on Some Markets

In some areas, the bank is the cornerstone of the area with deep, entrenched community roots and a solid reputation. It's a place where locals handle both their professional and personal banking interests. In these cases, adding financial advisory services is a natural fit.

With so many choices of affiliation, advisors may want to take a closer look at opportunities at financial institutions when weighing out the options. This is especially true for advisors who don't have the desire to take on the added complexities of being an entrepreneur as some of the other channels require.


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