Investors’ Wealth Management Preferences: Do Banks Stand a Chance?
Report Summary
Investors’ Wealth Management Preferences: Do Banks Stand a Chance?
Compared to baby boomers, Gen Xers and Gen Yers are more open to managing their investments through their primary banking relationship.
Boston, February 24, 2012 – A new report from Aite Group examines U.S. banks’ success in capturing the investment dollars of their existing bank-account customers. Based on a Q4 2011 Aite Group survey of 1,009 U.S. investors, the report introduces and examines three types of bank investment customers—Bank Consolidators, Committed Bank Investors, and Uncommitted Bank Investors—to identify opportunities for banks to grow and retain investing wallet share. It also examines the relative success that three banking categories—top five retail banks, large banks, and small banks and credit unions—have enjoyed in attracting customer investments.
As banks lose traditional revenue sources, they are focusing on growing organically by addressing the wealth management needs of their bank customers. The top five U.S. banks have encountered the most success with this, having achieved a primary investment relationship with approximately 40% of customers who hold a minimum of US$25,000 in investable assets. These banks have been most successful with younger investors; half of Gen Y customers of top five U.S. banks choose a retail bank as their primary investment provider. Banks in other segments may also find success in appealing to Gen Yers and Gen Xers, who are less inclined to use online brokerage firms than are baby boomers.
“The success of the top five U.S. banks shows that investing in online capabilities can help capture the investments of young, tech-savvy customers,” says Sophie Schmitt, senior analyst with Aite Group and author of this report. “Banks that are currently without online-investing capabilities will need to come up with similar strategies if they want to grow revenue in their wealth management divisions.”
This 38-page Impact Report contains 22 figures and one table. Clients of Aite Group’s Wealth Management service can download the report.