BISA Magazine - Quarter 1, 2017 - 5

Bank Brokerage
Revenue Could
Plunge 17% in 2017

H

ow will DOL's fiduciary duty rule affect
bank brokerage revenue in 2017? The typical
financial institution can expect investment
services revenue to plummet 17 percent,
according to Kehrer Bielan Research &
Consulting (KBRC), a bank brokerage consulting firm.
This estimate is based on a new interactive calculator
KBRC developed that enables firms to specify details about
their investment services business (e.g., characteristics of
the firm's advisor force, business mix, and pricing), and
estimate the impact of the DOL rule and the actions
the firm plans to take to comply with the rule. The
calculator was employed in a recent roundtable
the KBRC hosted for bank brokerage executives
that took place mid-December, after the U.S.
presidential election.
"We have heard from program managers
that they expected to take a revenue
hit next year, but were having
difficulty quantifying how
large it would be," said Tim
Kehrer, who developed
the interactive
calculator.

"We also know that many program managers have
difficulty convincing the institution's top management
and financial officers that the DOL rule means the end
of business as usual. We think that using our interactive
calculator will help educate top management and enable
program managers to bridge the expectation gap about
investment services revenue next year," Kehrer added.
There wasn't complete agreement on some elements
of the projection. For example, one participant in the
roundtable argued that net revenue might fall even
further for firms that already levelized annuity payouts if
annuity providers universally levelize commissions. Firms
that levelize annuity payouts tend to keep the difference
between what the annuity provider pays and the levelized
payout to the advisor.
Another participant disagreed with the consensus that
the "reasonable fees" requirement under a Fiduciary
Standard would necessarily reduce revenue. Under the
DOL rule, he argued, firms would have to eliminate
discounting of fees.
The Kehrer Bielan DoL Readiness Roundtable: Gut Check
at the Halfway Mark was held December 13-14, 2016 at
Fearrington Village, near Chapel Hill, North Carolina. 

5
BISA Magazine



Table of Contents for the Digital Edition of BISA Magazine - Quarter 1, 2017

Table of Contents
BISA Magazine - Quarter 1, 2017 - Cover1
BISA Magazine - Quarter 1, 2017 - Cover2
BISA Magazine - Quarter 1, 2017 - Table of Contents
BISA Magazine - Quarter 1, 2017 - 2
BISA Magazine - Quarter 1, 2017 - 3
BISA Magazine - Quarter 1, 2017 - 4
BISA Magazine - Quarter 1, 2017 - 5
BISA Magazine - Quarter 1, 2017 - 6
BISA Magazine - Quarter 1, 2017 - 7
BISA Magazine - Quarter 1, 2017 - 8
BISA Magazine - Quarter 1, 2017 - 9
BISA Magazine - Quarter 1, 2017 - 10
BISA Magazine - Quarter 1, 2017 - 11
BISA Magazine - Quarter 1, 2017 - 12
BISA Magazine - Quarter 1, 2017 - 13
BISA Magazine - Quarter 1, 2017 - 14
BISA Magazine - Quarter 1, 2017 - 15
BISA Magazine - Quarter 1, 2017 - 16
BISA Magazine - Quarter 1, 2017 - 17
BISA Magazine - Quarter 1, 2017 - 18
BISA Magazine - Quarter 1, 2017 - 19
BISA Magazine - Quarter 1, 2017 - 20
BISA Magazine - Quarter 1, 2017 - 21
BISA Magazine - Quarter 1, 2017 - 22
BISA Magazine - Quarter 1, 2017 - 23
BISA Magazine - Quarter 1, 2017 - 24
BISA Magazine - Quarter 1, 2017 - 25
BISA Magazine - Quarter 1, 2017 - 26
BISA Magazine - Quarter 1, 2017 - 27
BISA Magazine - Quarter 1, 2017 - 28
BISA Magazine - Quarter 1, 2017 - 29
BISA Magazine - Quarter 1, 2017 - 30
BISA Magazine - Quarter 1, 2017 - 31
BISA Magazine - Quarter 1, 2017 - 32
BISA Magazine - Quarter 1, 2017 - Cover3
BISA Magazine - Quarter 1, 2017 - Cover4
https://www.nxtbook.com/nxtbooks/bisa/2017q4
https://www.nxtbook.com/nxtbooks/bisa/2017q3
https://www.nxtbook.com/nxtbooks/bisa/2017q2
https://www.nxtbook.com/nxtbooks/bisa/2017q1
https://www.nxtbook.com/nxtbooks/bisa/2016q4
https://www.nxtbook.com/nxtbooks/bisa/2016q3
https://www.nxtbook.com/nxtbooks/bisa/2016q2
https://www.nxtbook.com/nxtbooks/bisa/2016q1
https://www.nxtbook.com/nxtbooks/bisa/2015q4
https://www.nxtbook.com/nxtbooks/bisa/2015q3
https://www.nxtbook.com/nxtbooks/bisa/2015q2
https://www.nxtbook.com/nxtbooks/bisa/2015q1
https://www.nxtbook.com/nxtbooks/bisa/2014q4
https://www.nxtbook.com/nxtbooks/bisa/2014q3
https://www.nxtbook.com/nxtbooks/bisa/2014q2
https://www.nxtbook.com/nxtbooks/bisa/2014q1
https://www.nxtbookmedia.com