Report Card on Trust and Retail Integration

By Kehrer, Kenneth | ABA Banking Journal, July 1999 | Go to article overview

Report Card on Trust and Retail Integration


Kehrer, Kenneth, ABA Banking Journal


Kenneth Kehrer, Ph.D., and Tom Cote. Contributing Editor Ken Kehrer is president of Kenneth Kehrer Associates, a Princeton, N.J., consultancy. Cote is an associate with Triad, Inc., a marketing communications firm in Larkspur, Calif.

Last issue, this department described how Chicago's Harris Bank & Trust has successfully integrated key elements of Trust, Private Banking, Asset Management, and Commercial Lending into a cohesive unit called the Private Bank. It was a multi-year effort involving complex cross-incentives, among other factors. This month we go from the specific to the macro, giving a view of the industry's progress integrating Trust and retail brokerage, based on two recent research efforts.

In many banks, securities brokers and trust calling officers find themselves competing for the asset management business of the same high-end customers. While this internal competition has been going on for over a decade, there is a new urgency to integrating these two business lines. New competitors--securities brokerage firms, insurance companies, and even commercial firms--are establishing or expanding trust businesses, and taking market share from traditional independent trust companies and trust affiliates of banks. These new competitors are not burdened by internal competition, as they have organized their trust business around their traditional relationship managers, whether they be stockbrokers, insurance agents, or account managers.

Banks are trying a variety of approaches to integrating the trust and retail investment brokerage business (ABABJ October 1998). Some of these approaches are organizational, some involve restructuring incentives, and others are just plain jawboning. How are these integration attempts working?

Views from managers and managed

Two recent surveys provide some insights about how the trust and brokerage executives feel integration is working from each of their perspectives, and how it might work better.

Kenneth Kehrer Associates surveyed 35 heads of bank retail investment services units for the Consumer Bankers Association, asking, among other things, for their views of working relationships with the trust area. At the same time, Bank Investment Marketing Magazine surveyed 125 trust officers, covering much of the same ground. While the survey items are not identical, they do provide a unique opportunity to see what each group thinks of the progress toward integrating these two business lines.

Both surveys asked who the respondents thought was their primary competitor. Bank broker/dealer executives and the trust officers both agreed that securities firms were the toughest competitor. Almost three-fourths of the brokerage chiefs saw other broker/dealers as the main competitor, compared to slightly over half of the trust officers. (The Kehrer survey allowed the brokerage heads to distinguish between nonbank and bank broker /dealers. Not surprisingly, traditional brokerages were eight times as likely to be considered the main competition than the newer bank brokerages.) Some brokerage chiefs saw mutual funds that sell direct to the public as the most important competitor, but only 15% held that view.

For their part, just under half of the trust officers saw other trust organizations as the primary competitor, with bank trust groups named almost four times as often as independent trust companies.

Very few in each group saw financial planners as the major competitor. In fact, the brokerage chiefs were more likely to name their own bank's trust department as their primary competitor than to identify planners. Integration is certainly not working in those banks.

While they largely agree on the competitive threat, the two groups of executives differ somewhat on how well the integration of trust and investments is proceeding. The majority of the trust officers find that the two units are "cooperative," while only 28% of the brokerage chiefs believe that the two groups work together "very well. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Report Card on Trust and Retail Integration
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.