A new report from Aite Group examines North American banks strategies for deepening relationships with their mass-affluent clients and winning their investment assets from full-service and online brokerage firms. It differentiates the approaches taken by U.S. and Canadian banks and provides an overview of banks mass-affluent offers and client acquisition methods. The report is based on Q4 2010 Aite Group interviews with more than 20 executives across 19 of the top 100 North American banks and bank-affiliated broker/dealers.
U.S. banks have experienced limited success with deepening their mass-affluent client relationships by cross-selling investment solutions. Overall, their brokerage arms have suffered from weak brand recognition in the investment world and challenging client-acquisition practices through the branch channel. In addition to these traditional roadblocks, banks must now contend with their clients increasing preference for viewing and managing their investments online and the resulting loss of investment assets to online brokerage firms. While many banks provide self-directed investment services, these are not on par with those of online brokerages. By comparison, Canadas bank brokerages have largely accepted the online channel and, in general, have been more successful in cross-selling investment solutions to their mass-affluent clients than U.S. banks.
U.S. banks must consider re-evaluating their mass-affluent offer in order to retain assets in the short term and position themselves to grow market share in this segment over the long term, says Sophie Schmitt, senior analyst with Aite Group and author of this report. Banks have an opportunity to differentiate themselves in the mass-affluent space–only they can provide clients with a full set of tools for managing short-term cash needs and planning for long-term goals.
D.C.