tag:blogger.com,1999:blog-235433516644980443.post7505296721632227191..comments2024-03-27T05:08:10.195-04:00Comments on Jeff For Banks: American Greed: Can being an honest broker be banks and credit unions competitive advantage?Jeff Marsicohttp://www.blogger.com/profile/12153599647481141591noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-235433516644980443.post-48244377546698840262015-11-12T06:08:18.936-05:002015-11-12T06:08:18.936-05:00This comment has been removed by the author.mytruehosthttps://www.blogger.com/profile/17822219410789759404noreply@blogger.comtag:blogger.com,1999:blog-235433516644980443.post-66944917584162708492014-02-06T18:32:57.000-05:002014-02-06T18:32:57.000-05:00Andy,
Third party providers (such as Raymond Jame...Andy,<br /><br />Third party providers (such as Raymond James or LPL) give community banks turnkey solutions for setting up such services. For their part, they take 8-12% of the revenue from the service. The other ~ 90% belongs to the bank if the investment reps are dual bank/3rd party provider. So if an investment rep gets 50 basis points on a $100MM portfolio, that's $450k to the community bank. Perhaps the payout to the rep is 35%, a typical number. That compensates the investment rep $157k, add another $30k for benefits, and another $45k for the salary/benefits of a sales assistant, the math looks like this:<br /><br />Revenue $450<br />Sal/Ben 232<br /><br />Gross Profit: $218<br /><br />Add in another $50k in expenses for licensing, training, entertaining, and FF&E and the pre tax profit in this scenario is $168. That's a 60% efficiency ratio, but 100% additive to ROA and ROE, because this is an off-balance sheet activity and doesn't have an "A" or require much in an "E".<br /><br />Now repeat this several times. And you have a program. The risk is the investment rep ups and leaves, which is a risk for anybody. But build a process that the brand is front and center, and he/she will have a difficult time getting the majority of his/her book to leave your bank.<br /><br />It can be done. But requires excellent execution, in my opinion.<br /><br />Thanks for the comment!<br /><br />~ Jeff<br />Jeff Marsicohttps://www.blogger.com/profile/12153599647481141591noreply@blogger.comtag:blogger.com,1999:blog-235433516644980443.post-5291646690116951432014-02-06T15:50:10.486-05:002014-02-06T15:50:10.486-05:00The challenge is infrastructure costs on setting u...The challenge is infrastructure costs on setting up this type of service for a community bank. How long until the bank can build a large enough asset base to get to profitability? What is the expected returns? The good investment advisers are more likely to go out on their own and run their own management firms or go to the big firms (better incomes, etc...)<br /><br />I agree in concept, just not sure from a practical standpoint the investment will turn out. Andynoreply@blogger.comtag:blogger.com,1999:blog-235433516644980443.post-22130285943179834622014-01-17T16:10:04.185-05:002014-01-17T16:10:04.185-05:00Veribanc focuses on the safety and soundness of th...Veribanc focuses on the safety and soundness of the whole bank. But who verify's the moral turpitude of the banker's within their walls?<br /><br />This post was geared towards developing a competitive advantage by helping individuals and businesses navigate an increasingly complex financial landscape.<br /><br />Can community bankers do it?<br /><br />Thanks for the comment!<br /><br />~ JeffJeff Marsicohttps://www.blogger.com/profile/12153599647481141591noreply@blogger.comtag:blogger.com,1999:blog-235433516644980443.post-73785580558006330752014-01-16T15:54:56.971-05:002014-01-16T15:54:56.971-05:00A very useful tool I have found to mitigate bankin...A very useful tool I have found to mitigate banking risk from a safety and soundness standpoint is Veribanc, http://veribanc.com/. They have an unbiased ratings model and a transparent track record. I have met the President, Mike Heller, and he is a really great guy. When I read the title "American Greed: Can being an honest broker be banks and credit unions competitive advantage?," his name came to mind even though he isn't a broker.Anonymousnoreply@blogger.com