The Benefits of Implementing a Second Story Strategy

Banks and credit unions have a mandate to grow their investment services business but are constrained by their branch systems because advisor coverage has been built to the territory limitations of the financial institution, and advisors believe their territories are engraved in stone. But some of those advisors have outgrown their need for branch referrals, and indeed find them frustratingly distracting from focusing on working more with their top clients, and capturing more share of wallet. And, with a dwindling flow of referrals, the firm can’t afford to provide additional referrals to advisors who have a large and established book of business.

The Benefits of Implementing a Second Story Advisor (July 2019)

Some firms have found a way outside the box of the branches and encouraged select advisors to move out of the branches, wean themselves from referrals, and focus on deepening client relationships. Many advisors flourish in this “second story” environment. Their move opens up branch territories for new advisor hires, adding additional revenue to the firm. This is a win-win for the firm as it gains from enhanced revenue from the second story advisors as well as from the incremental revenue from the new advisors.

To assess this trend, Kehrer Bielan conducted a flash survey of 46 banks and credit unions about their second story advisors and merged that information with our proprietary benchmarking data on the performance of those firms. The results of the analysis confirm the strong advantages of weaning advisors from branch referrals.



The Benefits of Implementing a Second Story Advisor Strategy

Current State of Second Story Advisor Programs in Financial Institutions


  • How did they come to be second story advisors?
  • How do these advisors source their business?
  • Are they paid differently?
  • How does their practice differ?
  • How did the firm choose advisors for this role?
  • What motivated the move to the second story?


The Impact of Second Story Advisors on Firm Performance


  • Penetration of the Opportunity
  • Advisor Coverage
  • Referrals
  • Profitability
  • Profit Penetration of the Opportunity
  • Advisor Productivity
  • Asset Acquisition
  • Transition to Advisory Business
  • Size of Client Books