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BANK ADVISORS

LEE CONRADBank Investment Consultant

2012

Interior BlankBank Overview

• 7,436 banks in the U.S., according to FDIC stats

• 6,769 have less than $1B in assets

• 561 between $1B and $10B

• 106 over $10B

BOTTOM LINE: Banking is skewed toward small banks. Shows a fragmented and localized industry.

Interior BlankBank Advisory Channel

• About 1,600 bank programs in U.S.

• About 17,000 to 18,000 bank advisors, 5% of total industry headcount. For comparison, 3 wirehouses have almost that many each.

BOTTOM LINE: Bank programs are small part of banks’ overall revenue and profit picture.

Interior BlankTwo Themes of the Industry

Bank advisors are in a very fragmented industry that is hard to reach.

• The advisors are widely dispersed and find themselves on the back burner because they don’t account for a large portion of the bank’s bottom line.

• They also don’t have the internal resources dedicated to them (such as the research a wirehouse advisor can access.)

BOTTOM LINE: This is a far-flung readership that is hard to reach andin need of help.

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1. Wells Fargo 2,8002. JPM Chase 2,3003. PNC 6504. US Bank 6005. Fifth Third 4606. SunTrust 4507. Regions 3008. Citi, 2809. Key Bank10. BB&T

NOTE: This is about 45% of the industry. Most of the rest deal with a third-party marketing firm.The biggest TPMs include: Raymond James, LPL, and PrimeVest.

Biggest Programs (by headcount)

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• Most common industry wide: annuities/insurance, mutual funds

• Most common among our top-50: Separately managed accounts (by far) Distant second: annuities and mutual funds

• Why: SMAs represent fee-based business, one of the ongoing trends in the channel and a top concern for 2012 (partly a reaction to market volatility).

Financial Products

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• Transferring to fee-business

• Managing retirement income

• More interest in products that mitigate risk

• Culture gap within their own branches

Other Trends and Factors Impacting Bank Advisors

Interior BlankNeeds of Bank Advisors (Overview)

• Practice ManagementAnything that helps them with their day-to-day routine.

• Investments/Portfolio ManagementTrends and news in asset classes, specific industries, financial products, global investing and portfolio construction

• CareersAdvice on their career path, from tips by headhunters to a particular company that is staffing up.

• Regulation/ComplianceAdvisors are always hungry for new information to help them keep up withthe onslaught of bank regulation.

Interior BlankNeeds of Bank Advisors (Specifics)

Practice Management

• Anything that helps them with their day-to-day routine. (This is the basis of one of our ongoing departments as well as one of our blogs).

• This can include any topics that helps advisors approach their job in a more effective way. Stories have focused on the areas of prospecting, marketing, dealing with clients and various initiatives within their banks such as cross selling.

BOTTOM LINE: This is a broad topic that deals with the actual work of an advisor. They’re looking for practical help for specific problems.

Interior BlankNeeds of Bank Advisors (Specifics)

Investments/Portfolio Management

• Bank advisors need to be expert (or at least knowledgeable) about more investments than ever. (Even if it’s to tell clients that they’re not suitable, like hedge funds or derivatives). This is the basis of one of our ongoing departments as well as one of our blogs.

• Articles can be about specific investments, allocations (how much to put to emerging markets, etc) or risk management.

• For specific products: Top products sold by our top 50, by far, were managed accounts. Followed by mutual funds and variable annuities.

BOTTOM LINE: This is a broad topic that deals with portfolio construction for clients in specific situations.

Interior BlankNeeds of Bank Advisors (Specifics)

Careers

• Bank advisors need information on their channel (and other channels) to maximize their careers. This is the basis of one of our ongoing departments as well as one of our blogs.

• Articles are usually written by headhunters in the industry and can focus on career options or specific advice on making a move.

BOTTOM LINE: This is a broad topic and has a rich opportunity to reach advisors in various stages of their careers (rookie, veteran, near retiree, etc.)

Interior BlankNeeds of Bank Advisors (Specifics)

Regulation/Compliance

• Ongoing and huge need for information.

• Quick anecdote: For the last full week of January, the most viewed story on our site (from readers who used a search engine) was the cover story from September on Dodd-Frank.

• They were actively looking for information, as opposed to an impulse click after getting our e-newsletter.

BOTTOM LINE: This is a broad topic and one in which bank advisors are constantly looking for information and new insights.

Interior BlankOther Areas

Areas where we will be increasing our coverage:

• Health care costs/concernsApplies to all advisors, but bank advisors are most likely to have “regular people” as clients, as opposed to high-net-worth investors. And they will feel the biggest impact for rising health care costs.

• Company specific news/analysisWe’re aiming for broader coverage of those bank programs in the channel.

FINAL THOUGHT: There are roughly 5,700 banks without advisory programs. A potential market for broker-dealers looking to start a new relationship (And if you do, let me know.)