Investment services programs are gaining ground at banks and credit unions.

In 2012, nearly 27% of commercial banks offered investment services, marking the first increase since 2001, a new report from Kehrer Saltzman & Associates has found.

“For years, the percentage of all U.S. banks selling investments hovered just under 25%,” Kenneth Kehrer, a principal of Kehrer Saltzman, said in a statement.

The revenue generated from investment services programs also increased, rising 17% in 2012 year-over-year. Banks and credit unions with their own broker-dealers saw an even bigger revenue jump of more than 19%. Those that partner with third-party marketers, in contrast, grew just 8%.

Advisor productivity also got a boost, increasing almost 3% in 2012. The average annual gross production in institutions that work with third-party marketers was up 5.2%, while the productivity gain in banks with in-house broker-dealers was only 2.1%. 

Not all was good news. The bank channel continues to experience a thinning out of the advisor sales force relative to the institution’s opportunity. The typical bank needs to more than double the number of advisors it deploys to take advantage of the opportunity present in its client base, according to the report.

“Banks that outsource their broker-dealer had one advisor for every $320 million in consumer deposits,” Kehrer said. “That figure represents less than half the coverage ratio that Kehrer Saltzman research has found to be best industry practice.”

The annual report draws on the firm’s Annual TPM Survey, other industry data, and the firm’s proprietary consumer research. It is sponsored by INVEST Financial Corp.

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