The combined trends of consolidation and outsourcing have reshaped the bank and credit union investment advice industry. As the number of financial institution affiliated broker dealers has decreased, Kehrer Group moved away from the practice of segmenting those firms in our other benchmarking reports. But the difference in expense structures between the bank affiliated brokers dealers and financial institution investment services practices supported by a third-party broker dealer necessitates separate profitability benchmarking for the two models.

The Annual Profitability Study provides key profitability metrics for financial institution owned broker dealers, and banks and credit unions that work with a third-party broker dealer, displayed side-by-side for easy comparison between the two expense structures. The metrics covered by the report include:

Net Income Contribution Margin
(net income before corporate G&A allocation as a percent of gross revenue)

Pre-tax Net Income Margin
(net income after corporate G&A allocation as a percent of gross revenue)

Efficiency Ratio
(direct and allocated expenses divided by revenue)

Efficiency Ratio Fully Loaded
(including G&A allocation)

Deposit Profit Penetration
(net income contribution per million of institution’s self-reported consumer deposits)

Deposit Profit Penetration
(net income contribution per million of institution’s FDIC core deposits / NCUA total shares)

Household Profit Penetration
(net income contribution per institution’s retail household)

Pricing

Financial Institutions – $250

Product & Service Providers – $500

Questions? Contact Reserach@kehrergroup.com.