Wealth management businesses at banks across the nation reeled in record revenue last year, according to the latest Sorrento-Pacific Michael White Bank Wealth Management Report released Wednesday.
Bank holding companies generated $143.2 billion in wealth management income, up 6.5% from $134.6 billion in 2013. It was the most revenue they've ever produced since the data started to be tracked in 2007.
Investment advisory/banking services were the biggest revenue generators, bringing in $56.91 billion, or 39.7% of the total. Securities brokerage came in second, producing $43.36 billion, followed by trust and fiduciary services, which generated $39.44 billion, and annuity sales, which whipped up another $3.53 billion.
"Wealth management services represent a great source of non-interest income for banks," said Valorie Seyfert, president and CEO of Sorrento Pacific Financial, a full-service broker dealer. "The continued record level growth of wealth management revenue in 2014 reflects the extensive opportunity these programs offer financial institutions."
Of the 576 bank wealth management programs, 478 earned a minimum of $250,000. Of those, 375 grew their wealth management revenue from 2013, with 44.6% achieving double-digit gains and 19.5% surging 20% or more.
Chatham, Illi.-based United Community Bancorp posted the biggest jump in wealth management revenue, generating $3 million, nearly triple the $1.1 million it produced in 2013. The next two fastest-growing wealth management programs were those run by Prosperity Banchares of Texas and Access National Corp. of Virginia, which generated $14 million and $1.9 million, respectively.
J.P. Morgan Chase & Co. produced the most wealth management income among bank holding companies with more than $10 billion in assets. Among those with assets between $1 billion and $10 billion, Stifel Financial Corp. led the charge. First Command Financial Services led banks with assets between $500 million and $1 billion, and The Harverford Trust Co. led those with less than $500 million.
The report is based on data from all 6,509 commercial banks, savings banks and savings associations (thrifts) and 1,052 large top-tier bank holding companies operating on Dec. 31, 2014. 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.
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