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Cogent Reports: IRAs Pave the Way for Banks into Wealth Management

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 consider their primary bank for wealth management products and services. These and other findings are from Investor Brand Builder™, an annual Cogent Reports™ study by Market Strategies International.

Banks currently claim an average of approximately 20% of total assets from the few customers who would look to them for wealth management offerings, demonstrating ample opportunity for wallet expansion among banks' current client base. “Aspiring banks should focus on IRAs as the path to moving traditional banking customers into their wealth management businesses,” noted Julia Johnston-Ketterer, senior director at Market Strategies and author of the report. “With nearly one in five affluent investors open to considering their primary bank for an IRA, focusing on IRAs over other traditional wealth management products would be an easier sell.”

“Banks have an uphill battle proving their wealth management expertise to investors, even to their customers whom they have a significant relationship with,” noted Mike Berinato, vice president at Market Strategies and head of the firm's banking sector. “Investors considering wealth management offerings from banks are younger and managing multiple financial goals. Banks need to offer holistic support for life stage challenges to win in the wealth management arena.”

Top Banks Considered for an IRA Among Primary Bank Users

  1. Citibank
  2. Huntington Bank
  3. Ally Bank
  4. Bank of America
  5. Sun Trust

Source: Market Strategies International. Cogent Reports™. Investor Brand Builder™. November 2017.

About Investor Brand Builder™

Cogent Reports conducted an online survey with 4,408 affluent investors who were recruited from the Research Now and SSI online panels from June to August of 2017. In order to qualify, respondents were required to have at least $100,000 in investable assets and have sole or shared household financial decision-making responsibilities. Due to their opt-in nature, the online panels (like most others) do not yield a random probability sample of the target population. Thus, target quotas and weighting are set around key demographic variables using the most recent data available from the US Census Bureau. As such, it is not possible to compute a margin of error or to statistically quantify the accuracy of projections. Market Strategies will supply the exact wording of any survey question upon request.

 
 

For more findings from Investor Brand Builder and our other financial services market research, read our blog, FreshMR

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