According to last year’s BISA-sponsored study by Aite-Novarica, median production of second story advisors in 15 bank-based investment services firms was 2.2 times the median production of branch-based advisors in 28 financial institution practices.

Source:  Growth Beyond the Branches (BISA 2021)


This is not surprising, since generally only top advisors are “promoted” to off-branch, second story situations.


For banks and credit unions, the opportunity to move advisors to the second story has largely been a growth play—filling the empty chairs in the branches vacated by the second story advisors.  For business directors and sales managers, however, there are important opportunity cost questions, because advisors generally become less profitable when they move to the second story, both because they often receive a higher payout, and generate greater expenses for sales assistance, expense allowances, and office space.

So, it is critically important to know what happens to the production of second story advisors when they switch seats. Does the newly minted second story advisor continue to produce at the same level?  Or freed from the traffic in the branches and windshield time covering multiple branches, does production actually increase?  Or does the advisor take the opportunity to cut back and begin the slow slide to retirement?

There are other important issues in optimizing the second story strategy:

  • Which advisors are a better fit for the second story role? Some might be more dependent on branch referrals, or the team environment of the branch, than they understand.  Others might seize the opportunity to dig deeper with existing clients and leverage them for referrals to their high net worth friends.
  • Does the firm have the ability to fill the empty seats in the branches? Will the institution with its rigid headcount and expense constraints let the firm hire more advisors?
  • How can managers use incentive compensation and other tools to optimize the second story strategy?


The Kehrer Group has the data and analytic tools to answer these questions.  Our proprietary database of 3 thousand individual advisors from 150 banks and credit unions includes information on their production and product mix, AUM and its composition, client book, age and tenure, access to sales assistant support, participation in an advisor team, financial planning activity, and branch deposit assignments or whether they are based off branch.  Using multivariate analysis, we are able to isolate the contribution of all those factors to an advisor’s performance, essentially comparing the same advisor in a branch or a second story situation.


We’ll provide a first look of this analysis at our Leadership Study Group May 18-19 in Chapel Hill.