Twenty years ago, the majority of new accounts opened by banks were trust accounts, while only a small minority were advisory accounts. That has since flipped 180 degrees. Now, the majority of accounts are advisory, with only a small percentage being trust accounts. Yet, many bank wealth management groups still put all of their accounts onto their trust accounting platform, since it is more convenient.
A growing industry trend is for banks to start their own registered investment advisor (RIA) and implement an investment advisory accounting and portfolio management platform. Then, new advisory business can be opened on the new platform and existing business can be migrated over in time.
I was fortunate to catch some time last week with Doug Fritz, president of F2 Strategy Consulting, while he was on a family vacation in Hawaii. Taking a break from the sun and sand, Doug and I had a wide-ranging discussion over Skype, which I recorded and posted on the WMToday YouTube channel. Some of the concepts we covered included:
- The approach that bank wealth management organizations take when servicing customers when compared to the approach used by advice-based RIA’s;
- The movement of the industry towards fee-based advice has narrowed the differences between advice-based and trust-based wealth management;
- The majority of new accounts that banks are opening do not have a trust associated; they are straight advisory accounts.
A few of the questions that we answer during this chat include:
- How has the agency and trust businesses come together over the past 20 years?
- What are the technology impacts from the agency and trust businesses being commingled together on the trust accounting platform?
- What are the considerations for any bank that is planning to launch their own RIA?
- Bank wealth management firms have struggled to keep up with innovation from wirehouses and RIAs
Click the link below to watch the video. (Just 15 minutes long!)
Craig Iskowitz, CEO of Ezra Group (www.ezragroupllc.com), speaks with Doug Fritz, President of F2 Strategy (www.f2strategy.com), about the trend of banks sta…
Bank Wealth Management
We are planning a series of video discussions on bank wealth management technology and trends. Watch this space for updates!