Bank brokerage had a terrible 2009, with investment revenue per $1 million in retail deposits falling 12%, according to Kehrer-LIMRA, which now has the full data for last year.

Bank brokerage had a terrible 2009, with investment revenue per $1 million in retail deposits falling 12%, according to Kehrer-LIMRA, which now has the full data for last year.

Kehrer-LIMRA uses revenue per $1 million in retail deposits to level the playing field between the largest and the smallest banks. Banks hit a high of $1,829 per $1 million in deposits in 2008, a figure that slipped to just $1,601 per $1 million in deposits in 2009.

On a more positive note, year-to-date numbers are flat at $1,579 per $1 million in revenue, the firm says in its latest Bank & Credit Union Investment Program Benchmarking Study, but the bulk of the Windsor, Conn.-based firm’s results focus on 2009, in which profit on revenues fell by 75% as advisors shifted to low-margin products.

Sales of annuities—both fixed and variable—suffered terribly last year, with fixed revenues down 25% and variable down 21%, due to low rates and investors’ reluctance to go anywhere near the equity market. Their subsequent flight to safety led to an uptick in stock and, more likely, bond sales (up 17%) and life insurance, which can be used as a fixed income account that provides income depending how it’s set up, was up 15% in terms of revenues.

Happily, investors’ growing confidence in the market is leading to a subsequent growth in bank-based advisors’ average monthly production. It took a hit in 2009, down 8% from 2008’s $25,609 (including commissions, trails and recurring revenue) to $23,692. However, 2010’s year-to-date numbers are much healthier, up 15% to $27,310 per month so far this year.

“All told 2009 was a challenging year,” concedes Scott Stathis, Kehrer-LIMRA’s managing director and chief operating officer. “To put things in perspective financial institutions went into 2009 with hope—61% of them had revenue goals that were higher for 2009 then they were in 2008. At the close of 2009 however 64% of financial institutions came in below their revenue goals.”

Year to date, the continued low-rate environment means annuities are still taking a hit, down 27%. However, investors’ interest in the market is coming back, and variable annuity revenues are up 16% and mutual funds are up 31%.

Stathis puts at least part of this growth down to good salesmanship and a can-do spirit from program managers and advisors. “We tend to plow ahead as an industry none-the-less, and true to form 56% of institutions went into 2010 with goals that were higher than in 2009,” he says. “That bet seems to be paying off since trending is slowly but surely moving in the right direction,” both in terms of advisors’ productivity and overall growth of bank-brokerage programs.