Optimizing Second Story Advisors

In a 2018 study, Kehrer Bielan compared performance data on 29 banks and credit unions that had moved some advisors out of their branches with the Kehrer Bielan proprietary industry benchmarks.  We found that firms with the “second story” advisors have experienced:


  • Deeper revenue penetration of the institution
  • No decline in profit margin
  • Greater profit contribution
  • Higher new asset acquisition

Optimizing Second Story Advisors

They have achieved this growth largely by adding advisors to backfill the branches the second story advisors formerly serviced, retaining highly productive advisors who might have been tempted to go independent, and finding ways to mine the opportunities in other areas of the institution outside the branch network.

The 2018 study piqued the interest of investment services directors looking for a growth strategy that is largely self-funded, but it left several questions unanswered:

  • Once advisors are removed from the branch environment with its branch meetings, windshield time, and need to service low opportunity clients, do they become more productive?
  • Or does their production suffer once they are weaned from referrals?
  • Or do they coast toward retirement in more comfortable offices?
  • Does the boost in revenue we observe in firms with second story advisors come just from the additional advisors hired to fill their former seats?
  • Which advisors are more successful in the second story environment?

And are the differences we observed in the study really due to the existence of second story advisors? Or to other differences among firms?  Investment services businesses in financial institutions differ in AUM and its composition, the mix of tenure and experience of its advisors, the size of the advisors’ books, and the level of institutional support, among other factors.

In the ensuing years since the 2018 study, Kehrer Bielan has deepened our analysis beyond the comparison of institutions so that we can answer these kinds of questions and reduce the chances that we attribute differences in performance to a factor like second story advisors when it should be attributed to some other factors. 

There are two elements to this analytic capability:

  • We have created a database of 2,884 individual advisors from 162 banks and credit unions, including their age and tenure, client book, size of their branch territory, AUM and its composition, production and its composition, access to sales assistants, and whether they are part of an advisor team or are a second story advisor.
  • We analyze this rich database with multivariate techniques that enable us to isolate the impact of each of these factors and assess how well our analysis explains advisor performance.

For this study, we will determine how moving to a second story impacts the performance of an advisor, and the characteristics of advisors who are more successful in that environment. 

Sponsorship fee:  $25,000