Bank wealth management businesses enjoyed a blow-out first quarter, according to the latest Sorrento-Pacific Michael White Bank Wealth Management Report released this week.
Bank holding companies reeled in $36.35 billion in first-quarter wealth management revenue, up 4% year-over-year. It was the most wealth management revenue banks have generated in any first-quarter period since the data started to be tracked in 2007. Revenue, however, was flat from the record-setting $36.38 billion in the prior quarter.
Investment advisory/banking services were the biggest first-quarter revenue generators, bringing in $14.8 billion, or 41% of the total. Securities brokerage came in second, producing $11 billion, followed by fiduciary services, which generated $9.7 billion, and annuity sales, which whipped up another $831.4 million.
Revenue from both investment advisory and fiduciary services were up from the first quarter of 2014, climbing 9.6% and 2%, respectively. Annuity sales, in contrast, fell 5.4%, while brokerage fees and commissions were flat year-over-year.
"Bank wealth management programs have been surging since the fourth quarter 2012," Valorie Seyfert, president and CEO of Sorrento Pacific Financial, said in a statement. "They got off to a record start in the first three months of 2015 compared to 2014. In fact, the last four quarters have been the biggest in terms of wealth management fee income," according to Seyfert.
Exactly 354 of the nations 576 largest banksthose with more than $1 billion in assetshad wealth management programs. Of the 354 programs, 320 were on track to earn a minimum of $250,000 in 2015. Of those, 228 grew their revenue from the first quarter of 2014, with 34% achieving double-digit gains and 19% surging 20% or more.
New York-based Bank Leumi posted the biggest year-over-year jump in first-quarter wealth management income, generating $4.3 million, more than nine times the $461,000 it produced a year ago. The next two fastest-growing wealth management programs were those run by Franklin Financial Network of Tennessee and Hilltop Holdings of Texas.
The report is based on data from all 6,419 commercial banks, savings banks and savings associations (thrifts) and 576 large top-tier bank holding companies operating on March 31, 2015. It was compiled by Michael White Associates, a research and consulting firm based in Radnor, Pa., and sponsored by Sorrento Pacific Financial with Imeriti Financial Network.