Wealth Management and Private Banking Survey Prospectus

Transcription

1 Kehrer Saltzman Wealth Management and Private Banking Survey Prospectus KSAWMPBS201307

2 Wealth Management and Private Banking Survey Prospectus Contents About this survey Benchmarking The Bank Wealth Management Business Personal Trust Pretest Results Private Banking Pretest Results Pricing About Kehrer Saltzman Page 1 Wealth Management Private Banking Survey Prospectus

3 About this survey The Kehrer Saltzman Wealth Management and Private Banking Survey is designed by bank wealth industry professionals for bank industry professionals to provide detailed and comprehensive insight into how your firm is performing relative to the bank wealth industry as a whole and to your peers. This new survey focuses on the key indicators that define the health of your firm, while providing valuable insight into the success of alternative models and ways that you might fine-tune your organization s structure to drive superior results. The survey provides detailed financial data from a universe of bank wealth management and private banking firms of various sizes as well as cohorts similar in size to your firm. In addition, the survey serves as a sophisticated tool that subscribers may use to develop best practices and to compare the effectiveness of various operating models, including sales and servicing structures. Our survey was developed by Wealth Management professionals with decades of industry experience in consultation with several wealth and private banking firms. In short, this important management tool is designed to deliver the information needed for firms to evaluate their business results taking into consideration the nuances of various business and staffing models and institution sizes. The survey report will allow participants to evaluate revenue and sales data by product type and by staffing position, providing critical insight into the effectiveness to your bank s model relative to your peers. We understand your business and we are committed to helping you evaluate your performance using the data you find most useful. The Process Participants in the survey will be asked to complete a relatively brief, but detailed survey. We have designed the survey to elicit specific information that we, in collaboration with key industry executives, consider central to benchmarking the success of wealth businesses. The survey takes into consideration different business models, different staffing configurations and different institution sizes, allowing participants to compare their results to those of similar institutions and to evaluate strategic changes to their business. Once the results are complied, we will distribute a report to each participant comparing their results to the universe and to relevant subsets of the universe. Page 2

4 The Metrics The following is a partial list of the critical private banking and wealth management operating ratios and benchmarking data our survey results will provide: Profitability Revenue as a percent of AUM Revenue as a percent of AUA Sales effectiveness by position Cost of sales Compliance expense Operations expense their metrics with peers. We have attached sample charts and tables derived from our pretest of the survey questionnaire. The charts and metrics are based on a limited sample and are illustrative of the kind of metrics that will be presented, not estimates of the final values from a broader sample. Following distribution of the survey report, participants will be invited to a roundtable to discuss the findings with Kehrer Saltzman s wealth management and private banking experts, as well as each other. Kehrer Saltzman has decades of experience in conducting these discussions over several components of the bank investment and insurance industries with very positive responses from the participants. Marketing expense Revenue and expense per FTE Staff productivity Client productivity Sample Deliverables The data will be aggregated and parsed to provide insights about differences by sales model, customer relationship model, money management sources, and firm size. Individual firm data will be displayed on a blind basis so that participants can compare Kehrer Saltzman Wealth Management Professionals The key professionals involved in the Wealth Survey are: Kenneth Kehrer, PhD Kenneth Kehrer has been studying the transformation of banks to financial services stores since the early 1980s. His research has influenced the metrics that a generation of industry practitioners has used to assess their businesses and assimilate Page 3 Wealth Management Private Banking Survey Prospectus

5 best industry practices. He also pioneered the concept of forming bank roundtable discussion groups that bring together professionals with similar job responsibilities to share experiences and react to the latest research. Dr. Kehrer reaches a much wider audience through his public commentary. He has testified before both houses of Congress and is frequently asked to comment on industry trends by the media. He has also been a member of the faculty of the Stonier Graduate School of Banking, a contributing editor of the ABA Banking Journal, a columnist for Bank Investment Consultant, and a frequent contributor to the American Banker, Bank Insurance and Investment Marketing and other publications. He earned his PhD in Economics from Yale University after graduating Phi Beta Kappa from Williams College and earning a Masters Degree in Indian History from Panjab University in Lahore, Pakistan as a Fulbright Scholar. In 2004 Dr. Kehrer received the prestigious Lifetime Achievement Award from the Bank Insurance and Securities Association for his contributions to the industry. At Kehrer Saltzman he has also been writing a series of White Papers that draw on the cumulative experience of the industry over the past three decades to better illuminate best practices and chart the future of the financial advice industry in banks. The most recent in this Guide to Growth Series, published by Cetera Financial, is Maximizing Your Customers Experiences Through an Integrated Wealth Management Offering. Peter G. Bielan Peter Bielan has been an active participant in the Bank owned Retail Investment and Insurance industry since His roles have encompassed Advisor, Sales and President of the Retail Broker/Dealer for two of the 15 largest US Banks. As part of Kehrer Saltzman & Associates, Bielan's focus is on growing investment, wealth management and insurance business within Banks. This includes everything from complete program reviews, to executing specific projects, to moderating industry conferences. Throughout his career he has strategically focused on profitably growing sales, developing the infrastructure needed for expansion, and leveraging the partnership between the Investment area and the other departments within the Bank. In recent years he has personally championed the transformation to fee based business, integrated Advisors into the Private Bank, incorporated insurance offerings, expanded Licensed Banker platform programs and developed Advisor recruiting programs. Bielan has also performed leadership roles in the Retail Bank, providing a first hand understanding of the significance of deposits and loans. Bielan has served multiple terms on the Bank Insurance Securities Association (BISA) Board and has been a presenter at many annual BISA conferences. He holds FINRA Series 4, 7, 8, 24, 27, 53 & 63 licenses. James F. Duca, II Mr. Duca is a Senior Associate of Kehrer Saltzman & Associates and has over 30 years of senior management experience in the bank wealth management and Private Banking industry. He has served in senior wealth management positions with three large, regional Midwest banks. His positions have included Trust Counsel, CEO of proprietary mutual fund complexes and Head of Private Banking and Personal Trust services. In each of these firms, Mr. Duca focused on integrating the personal wealth management business into a comprehensive offering including trust, asset management, brokerage and banking service. At Kehrer Saltzman,Mr. Duca participated in the development of the forthcoming Kehrer Saltzman Wealth Management and Private Banking Survey. Jim has a BA from Marquette University and a JD from the University of Wisconsin School of Law. In addition, he maintains FINRA Series 7, 24 and 63 registrations. Page 4

6 B Benchmarking the Bank Wealth Management Business Personal Trust Pretest Results - May 2010 New Business Development 'New'Business'Acquisi0on'by'Trust'Personal'with' Business'Development'Responsibility' $28$$ 'New'Business'Acquisi0on'by'Business' Development's'(BDO)' $86$$ $4.9$$ 6.3$ $13.3$$ 13$ 1st$Year$Revenue$ Annualized$per$Producer$$ (thousands)$ New$$per$Producer$$ New$Accounts$per$Producer$ (millions)$ 1st$Year$Revenue$ Annualized$per$BDO$$ (thousands)$ New$$per$BDO$$ (millions)$ New$Accounts$per$BDO$ Client Management Productivity in Personal Trust ''in'millions'! Account Data!!!!Account!Data! $6,489.0%% $207.4'' $94.7'' $19.9'' $791%% $1,073%% per'por/olio'mgr' per'trust'' per'fte' %per%account% (thousands)% Revenue%per%client%account%% Profit%per%client%account%% Revenue Pretax Profit 'Total'Revenue'(thousands)' 'Pretax'Profit'(thousands)' $1,413&& $307%% $568&& $127%% $160&& per&por0olio&mgr& per&trust&& per&fte& $24%% per%por.olio%mgr% per%trust%% per%fte% Page 5 Wealth Management Private Banking Survey Prospectus

7 Asset Productivity Profit Margin on Revenue is 15.2% Revenue&and&Profit&Metrics& 0.70%% 0.24%% %Revenue%on%% %Profit%on%% Personal Trust Pretest Results- 2011/2012 Pretest fees per Business Development fees per Relationship fees per Trust fees per Producer New per Business Development New per Relationship New per Trust PB8 $ 150,917 $ 12,836 $ 14,038 $ 28,045 $ 18,053,417 $ 1,408,712 $ 1,740,885 $ 73,000 $ 20,107 $ 28,121 $ 13,005,200 $ 3,587,464 $ 96,000 $ 77,900 $ 9,600 $ 60,176 $ 9,354,000 $ 5,319,000 $ 974,400 PB12 $ 25,810 $ 76,848 $ 76,848 $ 11,301,367 $ 167,250 $ 167,250 $ 14,667,000 PR3 $ 25,273 $ 75,858 $ 13,660,000 $ 98,944 $ 55,861 $ 52,749 $ 58,789 $ 13,518,154 $ 6,009,693 $ 5,242,437 $ 85,929 $ 76,848 $ 17,073 $ 28,121 $ 13,332,600 $ 5,319,000 $ 2,664,174 Highest $ 150,917 $ 77,900 $ 167,250 $ 167,250 $ 18,053,417 $ 11,301,367 $ 14,667,000 Lowest $ 73,000 $ 12,836 $ 9,600 $ 25,273 $ 9,354,000 $ 1,408,712 $ 974,400 PB8 PB12 PR3 New per Producer per Business Development per Relationship Pretest per Trust per Producer Total per Relationship Total per Portfolio $ 3,285, $ 33,726,479 $ 223,821,182 $ 5,014,394 $ 372,818,750 $ 4,535, $ 88,858,500 $ 222,146,250 $ 4,270, $ 150,652,800 $ 11,301, $ 134,720,380 $ 168,935,079 $ 14,667, $ 4,946, $ 192,602,667 $ 293,000, $ 90,020,000 Highest Lowest $ 6,860, $ $ 85,768,453 $ 214,249,591 $ 4,946, $ $ 88,858,500 $ 207,374,458 $ 14,667, $ $ 134,720,380 $ 372,818,750 $ 3,285, $ $ 33,726,479 $ 90,020,000 Page 6

8 Personal Trust Pretest Results- 2011/2012 Total per FTE Total Revenue per Relationship Total Revenue per Portfolio Total Revenue per FTE Total Accounts per Portfolio Total Accounts per FTE Total Profit per Relationship Total Profit per Portfolio PB8 PB12 PR3 $ 10,131,823 $ 580,233 $ 3,850,636 $ 174, $ 121,123 $ 803,818 $ 34,282,184 $ 1,975,750 $ 181, $ 61,875 $ 17,771,700 $ 797,600 $ 1,994,000 $ 159, $ 120,500 $ 301,250 $ 18,831,600 $ 1,280,000 $ 160, $ 406,000 $ 48,820,688 $ 939,899 $ 1,178,603 $ 340,606 $ 385,671 $ 483,619 $ 20,979,333 $ 144, $ 15,205,474 $ 1,546,333 $ 122, $ 307,000 $ 57,828,947 $ 795,533 $ 157, $ (207,800) $ 564, Highest Lowest $ 27,981,469 $ 772,577 $ 1,648,107 $ 179, $ 209,098 $ 307,966 $ 19,905,467 $ 797,600 $ 1,413,167 $ 159, $ 121,123 $ 307,000 $ 57,828,947 $ 939,899 $ 3,850,636 $ 340, $ 385,671 $ 803,818 $ 10,131,823 $ 580,233 $ 564,000 $ 122, $ 120,500 $ (207,800) Pretest Total Profit per FTE per Client Account Revenue per Client Account Expenses per Client Account Net pre-tax Profit per Client Account Revenue on Profit on PB8 PB12 $ 36,387 $ 341,570 $ 5,876 $ 4,650 $ 1, % 0.36% $ 5,690 $ 2,832,431 $ 15,010 $ 14,541 $ % 0.02% $ 24,100 $ 791,260 $ 7,102 $ 6,029 $ 1, % 0.14% $ 50,750 $ 502,176 $ 4,267 $ 1,906 $ 1, % 0.27% $ 139, % 0.29% $ 22,000 $ 396,668 $ 2,731 $ 2,315 $ % 0.10% PR3 $ 24,237 $ 997,941 $ 8,012 $ 6,421 $ 1, % 0.16% $ (41,013) $ 1,282,837 $ 3,483 $ 4,393 $ (910) 0.27% -0.07% $ 8, % Highest Lowest $ 32,739 $ 1,020,698 $ 6,917 $ 5,751 $ % 0.16% $ 24,168 $ 791,260 $ 6,489 $ 4,650 $ 1, % 0.15% $ 139,761 $ 2,832,431 $ 15,010 $ 14,541 $ 1, % 0.36% $ (41,013) $ 341,570 $ 2,731 $ 1,906 $ (910) 0.27% -0.07% Profit Margin Profit Contribution as a % of Revenue Percent of Managed Internally Pretest Percent of Managed by 3rd Party Percent of Custody Only PB8 PB12 PR3 20.9% 40.4% 65% 30% 5% 3.1% 3.1% 59% 0% 41% 15.1% 67.1% 98% 0% 2% 31.7% 62.7% 78% 0% 22% 41.0% 48.8% 69% 0% 31% 15.2% 33.7% 60% 36% 4% 19.9% 26.2% 73% 14% 13% -26.1% 38.5% 71% 0% 29% 91% 9% Highest Lowest 15.1% 40.1% 73.9% 9.8% 18.3% 17.5% 39.5% 70.9% 0.0% 17.1% 41.0% 67.1% 97.7% 35.6% 40.7% -26.1% 3.1% 59.3% 0.0% 2.3% Page 7 Wealth Management Private Banking Survey Prospectus

9 Private Banking Pretest Results- 2011/2012 Wealth Benchmarking Pretest Pretest fees per Business Development fees per Portfolio fees per Private Banker fees per Producer New per Business Development New per Portfolio $ 18,000 $ 72,250 $ 64,800 $ 2,267,000 $ 8,240 $ 575,000 $ 575,000 $ 195,000 $ 195,000 $ 9,745,000 $ 210,760 $ 129,900 Pretest New per Private Banker New per Producer per Business Development per Portfolio per Private Banker New Accounts per Producer Total per Relationship $ 10,886,000 $ 9,615, $ 126,296,000 $ 1,006, $ 10,947,600 $ 10,947, $ 9,745, $ 12,758,000 $ 7,828, $ 9,680, Page 8

10 Private Banking Pretest Results- 2011/2012 Total per Portfolio Total per FTE Total Revenue per Relationship Total Revenue per Portfolio Total Revenue per FTE Total Accounts per Relationship Total Accounts per Portfolio $ 1,002,714 $ 126,296,000 $ 14,858,353 $ 3,263,500 $ 3,263,500 $ 383, $ 1,291,324 $ 8,687,091 $ 572,204 $ 425,421 $ 412, $ 210,760 $ 5,975,295 $ 596,070 $ 129,900 $ 5,975,295 $ 498,812 Total Accounts per FTE Total Profit per Relationship Total Profit per Portfolio Total Profit per FTE per Account Deposit Balances per Account Loan Balances per Account 75.9 $ 417,714 $ 131,703 $ 365, $ 1,812,500 $ 1,812,500 $ 213,235 $ 1,913,576 $ 1,068,121 $ 1,106,985 $ 671,649 $ 4,518,364 $ 297, $ 131,001 $ 52, $ 125,289 $ 29,992 $ 10,220 $ 620, $ 263,464 $ 340,204 $ 431, $ 255,426 $ 131,352 $ 365,969 Revenue per Account Expenses per Account Net pre-tax Profit per Account Revenue on Profit on $ 13,206 $ 7,499 $ 5,501 $ 49,447 $ 21,985 $ 27, % 1.44% $ 349 $ 735 $ 518 $ 216 $ 20,045 $ 20,858 $ 7,588 $ 11,060 $ 16,626 $ 4,008 $ 5,501 Page 9 Wealth Management Private Banking Survey Prospectus

11 Pricing The cost of participation is based on the size of the firm: Under Administration (AUA) Participants Nonparticipants More than $1.5 billion AUA $5000 $7500 Less than $1.5 billion AUA $3000 $5000 If your or your firm would be interested in participating, contact us today. Jim Duca Kehrer Saltzman & Associates Launches Wealth Managment Survey Kehrer Saltzman & Associates, the strategic management consulting firm for the financial advice industry, announced that it has launched a groundbreaking survey to benchmark the wealth management businesses in banks. For years the financial advice industry has sought the kind of detailed benchmarking data that Ken and Chris Kehrer pioneered for bank investment and insurance services in the 1990s, commented Peter Bielan, a principal of Kehrer Saltzman and project director for the survey. To meet this need, Kehrer Saltzman & Associates is launching a new survey designed to quantify the productivity and penetration of personal wealth management in the bank environment, including its component lines of business Individual Trust, Private Banking, and Portfolio Management, Bielan added. We are very aware of the complexity of surveying an industry with such diverse business models, said Dr. Kenneth Kehrer, also a principal of Kehrer Saltzman & Associates. >Read More at KehrerSaltzman.com Page 10

12 Kehrer Saltzman & Associates, LLC (KSA) is a strategic management consulting firm that provides the financial advice industry with insights based on a melding of thoughtful institutional and consumer research, and deep experience in managing the delivery of investment, insurance, and wealth management services. We work with banks, broker-dealers, insurance companies and related financial services companies to provide services including market research, product and business development, consulting and industry discussion groups. Please visit us at or [email protected] for more information. This information is the protected intellectual property of KSA and may not be copied, distributed or transmitted without prior written authorization. Any unauthorized attempt by any person or entity to copy, distribute or transmit this information without prior written consent will subject such person or entity to legal enforcement action. The information presented herein is not intended to provide tax, legal, accounting, financial, or professional advice. KSA does not guarantee that the information provided has not been outdated or otherwise rendered incorrect by new research, legislation, or other changes in law. KSA shall not have any liability or responsibility to any individual or entity with respect to losses or damages caused or alleged to be caused, directly or indirectly, by the information contained in this document. Information contained herein does not constitute a tax opinion and is not intended or written to be used, nor can it be used, by any taxpayer for the purpose of avoiding taxes or penalties that may be imposed on the taxpayer. Contact Ken Kehrer, PhD (919) [email protected] Jim Duca [email protected] Kehrer Saltzman & Associates 9218 Skipaway Drive Waxhaw, NC Phone: (704) [email protected]