Small financial institutions are beating the big guys in cross-selling investment services.
In a new benchmarking study released Thursday, Kehrer Bielan Research & Consulting found that credit unions generated more revenue from investment sales per million of member deposits than did banks large enough to own their broker dealer.
According to the report, credit unions generated an average of $1,514 in revenue in 2013, whereas banks with their own broker dealer generated $1,384, or 9% less. They also achieved a better penetration of their opportunity, earning $360 per million of share deposits, 21% better penetration than the banks, noted Kenneth Kehrer, a principal of Kehrer Bielan Research & Consulting.
Overall, credit unions enjoyed a strong 2013, with revenue growing 4% from the previous year. The share of credit unions providing investment services also increased. More than one in 10 credit unions, or 13.8%, provided those services last year, up from 12.3% in 2012.
Credit unions, however, lagged their larger rivals in terms of advisor productivity. The typical financial advisor in a credit union brought $7.7 million of new investment assets to the institution during the year and produced $246,325 in investment services revenue, less than what the bigger bank broker dealers produced. The firm did not disclose the difference in its press release.
The 2013-2014 Kehrer Bielan Credit Union Investment Services Benchmarking Study drew on data from 905 credit unions with investment services offerings and an in-depth survey of a sample of 46 credit unions.
- Bank-Owned Broker Dealers Grow Revenue 8%
- Bank-Owned Broker Dealers Decline
- Credit Unions With Investment Programs Jump