Banks looking to boost their profits are missing the boat on a big opportunity:  marketing investment and insurance products to mass-affluent households.  According to a study from Consumer Financial Decisions, a financial-services marketing and research group, only two out of 10 mass-affluent customers — those with $100,000 to $1 million in financial assets — have purchased these products from their banks or credit unions.

The study found that customers who purchase investment and insurance products where they bank have, on average, $348,000 in investable assets, 84% more than the financial assets held by other households.  It also found that investment and insurance customers are 34% more likely than other households to stay with their current financial institution, even if they receive better offers.  Selling the typical customer additional banking products, in contrast, did not yield meaningful increases in customer loyalty, the research found. 

“The results provide the proof needed for banks and credit unions to seize the opportunity for developing investment and insurance relationships with existing customers,” Kenneth Kehrer, founder of Kehrer-LIMRA and co-author of the study, said in a statement. 

Other tidbits from the study:

  • Consumers who purchased an investment or insurance product from their primary banks or credit unions have checking account balances that are 16% higher than households without a brokerage or insurance relationship.
  • Brokerage customers have savings account balances that are on average 85% higher than non-brokerage customers.
  • Brokerage and insurance customers have more than twice as many credit products and 11% more remote banking products than customers who have not purchased an investment or insurance product from their banks or credit unions. 

The study, entitled The Value of an Investment and Insurance Customer to a Bank, was co-sponsored by Prudential Financial, Inc. and Western National Life.  It draws on data from the MacroMonitor, a retail financial-services and marketing database that has measured, analyzed and interpreted consumer attitudes, behaviors and motivations since 1978.  The 2010/2011 MacroMonitor is a national sample survey of 4,374 households, with an oversample of 1,500 affluent households, re-weighted to be representative of the U.S. population, Prudential Financial said in a statement.

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