BISA Magazine - Quarter 3, 2017 - 4

UP FRONT

Fee-based
Bright Spot Amid
TPM Gloom
Revenue from advisory fees now accounts for 23 percent
of the total revenue from financial institutions in the TPMs,
up from 19 percent in 2015 and 10 percent in 2010.

S

lowly, inexorably, banks are moving toward a
fee-based investments business - that is one of
the key findings of the Kehrer Bielan Annual TPM
Report 2016/2017.

The 2016 revenue derived from fees on advisory
accounts increased 12 percent year-over-year in the financial
institution channel among the 10 largest third-party broker/
dealers, better known as third-party marketing firms (TPMs).
This was the sixth year in a row of advisory gains, and it
represents one of few bright spots in a dismal year.
"By most measures, the TPMs endured a difficult 2016,
during which they suffered declines in total revenue from
financial institutions (down 4 percent), financial advisor
head count in financial institutions (down 5 percent), and
number of financial institution partners (down 1 percent),"
noted Kehrer Bielan in a press release.

standard rule for qualified retirement accounts, which was
announced in early 2016 and was set to go into effect in
April of this year until the Trump administration intervened,
spurred the TPMs and their partner institutions to accelerate
the transition."
Although the fate of the DOL's fiduciary standard rule is
now uncertain, its impact was acute in 2016. Preparations to
comply with the rule, and concerns about what life under the
rule would be like, undoubtedly contributed to the drop off
in revenue and headcount in the TPMs, according to Kehrer.
Another factor that may have contributed to the contractions
in revenue and head count that the TPMs experienced 2016:
acquisitions by the large banks.

Revenue from advisory fees now accounts for 23 percent of
the total revenue from financial institutions in the TPMs, up
from 19 percent in 2015 and 10 percent in 2010.

"A handful of the largest banks working with third-party
broker dealers were acquired by even larger banks that own
their broker/dealer," explained Kehrer."Because these banks
represented an outsized share of the revenue and advisors
associated with their former TPMs, their departure left a
significant hole that has yet to be filled."

"The TPMs began emphasizing advisory business years
ago, drawn to the recurring revenue that managed accounts
generate year after year for their advisors and partner
institutions," explained Tim Kehrer, author of the Annual
TPM Report. "The Department of Labor's (DOL) fiduciary

Significant acquisitions during 2016 included First Niagara,
which outsourced its broker/dealer functions to LPL before
being acquired by Key Bank; and National Penn Bank, which
outsourced to Cetera Investment Services before being
acquired by BB&T.

4
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Table of Contents for the Digital Edition of BISA Magazine - Quarter 3, 2017

Table of Contents
BISA Magazine - Quarter 3, 2017 - Cover1
BISA Magazine - Quarter 3, 2017 - Cover2
BISA Magazine - Quarter 3, 2017 - Table of Contents
BISA Magazine - Quarter 3, 2017 - 2
BISA Magazine - Quarter 3, 2017 - 3
BISA Magazine - Quarter 3, 2017 - 4
BISA Magazine - Quarter 3, 2017 - 5
BISA Magazine - Quarter 3, 2017 - 6
BISA Magazine - Quarter 3, 2017 - 7
BISA Magazine - Quarter 3, 2017 - 8
BISA Magazine - Quarter 3, 2017 - 9
BISA Magazine - Quarter 3, 2017 - 10
BISA Magazine - Quarter 3, 2017 - 11
BISA Magazine - Quarter 3, 2017 - 12
BISA Magazine - Quarter 3, 2017 - 13
BISA Magazine - Quarter 3, 2017 - 14
BISA Magazine - Quarter 3, 2017 - 15
BISA Magazine - Quarter 3, 2017 - 16
BISA Magazine - Quarter 3, 2017 - 17
BISA Magazine - Quarter 3, 2017 - 18
BISA Magazine - Quarter 3, 2017 - 19
BISA Magazine - Quarter 3, 2017 - 20
BISA Magazine - Quarter 3, 2017 - 21
BISA Magazine - Quarter 3, 2017 - 22
BISA Magazine - Quarter 3, 2017 - 23
BISA Magazine - Quarter 3, 2017 - 24
BISA Magazine - Quarter 3, 2017 - 25
BISA Magazine - Quarter 3, 2017 - 26
BISA Magazine - Quarter 3, 2017 - 27
BISA Magazine - Quarter 3, 2017 - 28
BISA Magazine - Quarter 3, 2017 - 29
BISA Magazine - Quarter 3, 2017 - 30
BISA Magazine - Quarter 3, 2017 - 31
BISA Magazine - Quarter 3, 2017 - 32
BISA Magazine - Quarter 3, 2017 - Cover3
BISA Magazine - Quarter 3, 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