Bank trust assets reached $2.3 trillion by the end of 2012, just shy of the pre-crisis level, according to estimates from Cerulli Associates.

 

"Bank trusts have long been regarded as an important destination for wealth management among high-net-worth institutional and individuals," says Donnie Ethier, senior analyst at Cerulli.

The bank trust channel is important despite a modest growth outlook, according to Cerulli. “Understanding the bank trust channel is crucial regardless of whether an asset manager is seeking a new distribution outlet, an established bank trust is in the midst of strategic planning, or a competing provider is contemplating the creation of a trust company to expand its offerings to savvy HNW investors," Ethier explains.

The potential obstacles for growth begin with the growing competition in the space, which includes the increasing presence and threat of RIAs and the direct channel. And this competition may increase even more as investors seek greater fee transparency and younger generations continue to inherit wealth.

Cerulli defines a bank trust organization as a division of a bank or registered broker/dealer that provides fiduciary wealth management advice under the '40-Act Exemption, which exempts them from securities registration.