Wealth management, trust services to grow
Banks that earn fees from wealth management and trust services are poised for double-digit growth and better stock market valuations than commercial banks.
Banks that rely heavily on fees from wealth management and trust services are poised for a double-digit rate of growth and better stock market valuations than commercial banks, according to Gerard Cassidy, managing director of equity research for RBC Capital Markets Corporation in Portland, Maine.
“Investors like to see steady predictable growth, and fee-based banks tend to be our growth stocks,” Mr. Cassidy said at this morning’s general session of the annual American Bankers Association Wealth Management and Trust Conference in San Diego. “Competition is very intense, but long-term trends are very positive for fee-based banks.”
Mr. Cassidy cited Chicago-based Northern Trust Corp. as an example of a fee-based company “that has done extremely well in the wealth management business.” He later described Northern Trust as “one of the best financial companies in the United States.”
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