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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.
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.