A new study suggests that banks have a big opportunity to lean on loyal customers and millennials for future growth but even that might not be enough
It all starts with a plan.
At least that is the finding of a new LIMRA research report, Banking on Loyalty, which suggests long-time bank customers are more likely to buy insurance and wealth management products from their bank if they have a financial plan.
More than half of the survey respondents had been customers of their bank or credit union for more than 10 years making them an extremely loyal cohort. Unfortunately, for the banks, 69% of those customers use their financial institution solely as a place to store their cash until they need to pay bills.
Less than 25% of the survey respondents consider their bank a place to invest money or build wealth which is great news for independent advisors.
"Because of these perceptions, banks that offer insurance and investment products may struggle," said Patrick Leary, corporate vice president, Distribution Research for LIMRA. "Our research shows customers who have a financial plan through their bank are more engaged and more likely to purchase these products. They view their bank or credit union relationship in a different way.”
For insurance advisors the most important finding is that 38% of bank customers were willing to buy insurance through their primary financial institution if they had a financial plan prior to doing so compared to just 19% without a plan. The numbers are even higher for investment-related products.
So, if you’re a dual-licensed advisor, LIMRAs findings suggest a financial plan can lead to you grabbling business from your banking competitors.
And what makes millennials so important in this discussion is the fact that they have more of their savings and investments at their primary bank or credit union than other groups.
“Older Millennials are now in their 30s and starting to build wealth, buy homes and start families,” said Leary. “They are also less likely to have a relationship with a financial advisor or insurance agent.”
More importantly, 60% of Millennials say it’s very important to have all their financial needs met in one place.
They’re there for the taking.
At least that is the finding of a new LIMRA research report, Banking on Loyalty, which suggests long-time bank customers are more likely to buy insurance and wealth management products from their bank if they have a financial plan.
More than half of the survey respondents had been customers of their bank or credit union for more than 10 years making them an extremely loyal cohort. Unfortunately, for the banks, 69% of those customers use their financial institution solely as a place to store their cash until they need to pay bills.
Less than 25% of the survey respondents consider their bank a place to invest money or build wealth which is great news for independent advisors.
"Because of these perceptions, banks that offer insurance and investment products may struggle," said Patrick Leary, corporate vice president, Distribution Research for LIMRA. "Our research shows customers who have a financial plan through their bank are more engaged and more likely to purchase these products. They view their bank or credit union relationship in a different way.”
For insurance advisors the most important finding is that 38% of bank customers were willing to buy insurance through their primary financial institution if they had a financial plan prior to doing so compared to just 19% without a plan. The numbers are even higher for investment-related products.
So, if you’re a dual-licensed advisor, LIMRAs findings suggest a financial plan can lead to you grabbling business from your banking competitors.
And what makes millennials so important in this discussion is the fact that they have more of their savings and investments at their primary bank or credit union than other groups.
“Older Millennials are now in their 30s and starting to build wealth, buy homes and start families,” said Leary. “They are also less likely to have a relationship with a financial advisor or insurance agent.”
More importantly, 60% of Millennials say it’s very important to have all their financial needs met in one place.
They’re there for the taking.
