How to Expand Traditional Banking Relationships

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How to Expand Traditional Banking Relationships

Opportunity Lies with IRAs and the Younger Generations

National and regional banks are facing a big challenge in establishing themselves in the wealth management industry—even among their best, most affluent bank customers. Although it would seem to be a natural extension of banks’ offerings, fewer than 20% of affluent investors would even consider their primary bank for wealth management products and services. Moreover, banks claim an average of just 20% of the total assets from the few customers who would consider them for wealth management offerings, so there is ample opportunity for wallet expansion among banks’ current client base.

To dive deeper into potential opportunity, we asked affluent investors how likely they would be to consider their primary bank for a list of wealth management product and services. Nearly one in five would consider opening an IRA with their primary bank. This positions IRAs as a gateway for aspiring banks to move traditional banking customers into their wealth management businesses and obtain a greater percentage of their customers’ overall assets.

Highlighting an opportunity to target further, significantly more affluent Millennials and Gen Xers are likely to consider their primary bank for wealth management products and services than not. Targeting these younger generations through their preferred digital platforms will give banks an edge and the potential boost to consideration from these investors.

Primary Bank as Wealth Manager Demographic Profile

So, which affluent clients are most likely to travel the crossroads of banks and wealth management?

The answer is Millennials and Gen Xers looking for brokerage accounts, especially IRAs. The key to winning this business is targeting younger generations with expanding wealth and meeting the higher level of client engagement that younger affluent investors have come to expect from wealth management providers.

This year, we added a section to our Investor Brand Builder™ report to further explore how affluent investors view banks in the wealth management space. For more information on the study including a list of exhibits in this new section, review an overview of the report.

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This entry was posted in Brand and Messaging, Financial Services, Product Development and tagged by Julia Johnston-Ketterer. Bookmark the permalink.
Julia Johnston-Ketterer

About Julia Johnston-Ketterer

Julia Johnston-Ketterer is a senior director in the Syndicated Research division. She has more than 15 years of experience leading research initiatives on the client- and supply-sides of the financial services industry focusing on investors, advisors and broker-dealers. Prior to joining Market Strategies, Julia was vice president of business development for Market Probe, Inc. and research associate for Richard Day Research, where she managed financial services clients and conducted client satisfaction studies and PR research programs. Julia also spent ten years at Fidelity Investments. While there, she built a research team that provided primary and secondary research to internal marketing and communications partners. Julia earned an MBA in finance and communications from Simmons School of Management and a bachelor’s degree in French and international relations from the University of Wisconsin-Madison. While she can claim having twice bungee-jumped in New Zealand, Julia’s current adventures outside of work include being a hockey mom, taking hikes with her dog and planning her next family beach vacation.

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