Consumers’ attitudes about banks’ reputation dropped to 77 index points, down four points since February 2010, but essentially have leveled off, according to the biannual BAI/Finacle Index of Bank Sentiment, which was benchmarked at 100 points in August 2009.

The positive is that the decline is slowing,” said Dan Hough, director of research at BAI in Chicago. “That could be an indication that consumer sentiment is stabilizing or even that there might be an uptick,” although he noted he wouldn’t know for sure until the research firm polls another 2,500 investors in February.

The index also measures bank executives’ perception of consumer sentiment, which was on an upward trajectory when it hit 137 points in February 2010 but has since plummeted to 121 points, although that’s still significantly better than the truth.

Bank customers who took a rosier view of their financial institutions tended to focus on a couple of criteria. Innovation, for one, hit high marks among consumers. Indeed, 85% of consumers say they shouldn’t have to pay fees for a checking account. Meanwhile,

some 93% of respondents said their bank is innovative based on the online access it offers, indicating their support for their own institutions, just not the industry at large.

To Ajay Nagarkatte, managing director of BAI, consumers’ loyalty to their own bank but distrust of others should send a clear message to advisors that now is the time to look within their institutions for leads. “Advisors should take advantage of that and look within their own customer bases, not outside, for new business,” he advised.