New Study Chronicles 20 Years of Mergers and Outsourcing Deals


This past year has witnessed an acceleration of the shrinkage of the financial institution-owned broker dealer segment, as banks and credit unions merge or fail, or they outsource the broker dealer function to third part BDs.  This year’s Kehrer Bank Broker Dealer Study identified 93 financial institutions that owned broker dealers 20 years ago. Today there are only 27 regional banks with their own broker dealer.

According to the study, over the past 4 years the number of regional banks—institutions with more than $10 billion in assets, excluding money center and specialty banks—that maintain their own BD has shrunk 16%.

The number of regional banks has consolidated over this period, but the share of regional banks that outsource will grow from 54% in 2018 to 60% in 2023, based on outsourcing agreements that have already been announced.

While the number of advisors in regional banks, community banks, and credit unions has remained steady over the past 4 years, the share of them in the bank-owned BDs continues to shrink. The number of financial advisors in bank-owned BDs has declined 15% since 2020.


This year there will be almost twice as many advisors in banks and credit unions that outsource than in the banks with their own broker dealer.

Historically, the bank-owned BDs have controlled the lion’s share of AUM in financial institutions.  As the outsourcing trend gathered momentum, the share of AUM in the bank-owned BDs has shrunk.


2022 marked the first year that AUM in regional and community banks and credit unions that partner with third party BDs surpassed AUM in bank-owned BDs.


About the Annual Kehrer Bank Broker Dealer Study. The Annual Kehrer Group Bank Broker Dealer Study has been conducted since 2014. 22 financial institution-affiliated broker dealers, which collectively employ 2,912 advisors, participated in the 2022-2023 survey, which was sponsored by LPL Financial.