Insight June 2004 Monthly Update

“Despite their unmatched access to clients, deposit-takers lagged the industry in building mutual fund assets during the boom days of the 1990s. They lacked staff with the right skills and a cost-effective sales model to deliver advice at the branch level, and thus lost many potential investors to competitors. But no more. Once they recognized and accepted the need for change in how they sell investment products, deposit-takers made an enormous commitment of resources to bring that about. The result: the creation of a new delivery channel— branch advice—that has recently outpaced all others in building assets. Our last in-depth look at branch advice—in May 2002—was done at a time when this channel was still largely under construction. Now it has pretty much been built. Accordingly, this issue of Insight provides an updated and expanded measure of this fast-growing channel, now in the forefront of the deposit-takers’ delivery of wealth management products. Beyond the fund and fund wrap assets we originally measured, this time around financial institutions were able to provide us with a more comprehensive data set, particularly with regard to this channel’s deposit business. While the major construction of this channel may be over, refinement continues in its structure and, importantly, in its data. Although institutions have put considerable effort into creating reporting systems, assets generated by branch advisors at several institutions are still embedded in the retail banking or full-service brokerage figures. As organizations isolate these numbers, we will develop an ever more accurate picture.”