The bank channel, long regarded as a minor league to the glitzier and higher-paying wirehouses and RIAs, is on the verge of taking a major-league step ahead.

While banks may never attract as many high-net-worth clients as the other channels, at least one big obstacle to the big-time—a lack of succession planning—is beginning to fall. Traditionally, a bank advisor’s most lucrative retirement option would be to break away and go independent several years before she wanted to retire and, eventually, sell off her book. To be sure, that’s still the way many approach the issue. See our Careers story by contributor Rick Rummage for tips on how to manage that.

But if you work for the small but growing number of banks that face this challenge proactively (or you’re young enough to wait out a nascent business trend) you may be able to enjoy a real succession plan at your bank.

Our cover story has the details, including the history of this challenge and the emerging exceptions to the rule. And that’s what these banks are so far—exceptions. But contributor Dave Lindorff spoke to some of the larger regional banks and TPMs, and they all agreed that this is taking on a larger role in the channel. Banks want to keep the fee income their advisors are generating more with each passing year, and if they don’t put a plan in place to do so, a competing bank will be all too happy to poach their advisors.

Lindorff said one of the big takeaways from his reporting was that establishing a succession plan  can be revenue-neutral for a bank. Having these plans in place does not have to cost the bank a penny; but not having them could cost dearly if the advisor leaves and takes half his clients with him.

Why haven’t banks been quicker to adopt these plans? Rob McCabe of Pinnacle Bank, who’s quoted in our story, summed it up best when he said that most banks haven’t dealt with it because they haven’t faced it yet. With the average advisor in his late 50’s, they will soon. Or else they risk more time in the minor leagues.

Read more:


Register or login for access to this item and much more

All Bank Investment Consultant content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access