Bank and thrift holding companies generated record revenue from their wealth management businesses in the first half of 2014, according to the latest Sorrento Pacific Michael White Bank Wealth Management Report released this week.
In the first half of 2014, banks reeled in $71.2 billion in wealth management income, up 6.2% year-over-year.
Investment advisory and banking services were the biggest revenue drivers, generating $28.4 billion, or 39.9% of the total. Securities brokerage came in second, producing $21.6 billion, followed by trust and fiduciary services, which brought in $19.4 billion, and annuity sales, which whipped up another $1.8 billion.
Of the 569 wealth management programs, 477 were on track to earn a minimum of $250,000 this year. Of those, 359 showed some level of positive growth in wealth management income over 2013, with 46% achieving double-digit growth and 24% growing 20% or more.
"The results we're seeing are all very good news for the industry," said Valorie Seyfert, president and CEO of Sorrento Pacific Financial, a full-service broker dealer based in San Diego. "This quarter's report shows that banks that generate meaningful wealth management fee income are experiencing robust growth and offsetting declining or flat traditional bank revenues."
Capital Bank Financial Corp. posted the biggest jump in wealth management fee income, generating $2.2 million, more than three times the $605,000 it produced in the first half of 2013. The next two fastest-growing wealth management programs were those run by Prosperity Bancshares in Texas and United Financial Bancorp. in Connecticut.
JP 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 Haverford Trust Co. led those with less than $500 million.
The report is based on data from all 6,656 commercial banks, savings banks and savings associations (thrifts) and 1,063 large top-tier bank holding companies operating on June 30, 2014. It was compiled by Michael White Associates, a research and consulting firm based in Radnor, Pa., and sponsored by Sorrento Pacific Financial.