LPL Financial Co-Sponsored Study Shows Major Untapped Opportunity for Retail Financial Institutions

SAN DIEGO, March 2, 2012 /PRNewswire/ -- LPL Financial LLC, the nation's largest independent broker-dealer* and a wholly owned subsidiary of LPL Investment Holdings Inc. (NASDAQ: LPLA), today announced several key findings from a new study examining the role of investment services and insurance customers at retail financial institutions.  The study, "The Value of an Investment and Insurance Customer to a Bank," was conducted by Kenneth and Christine Kehrer and Peter Bielan, and was co-sponsored by LPL Financial.

Among the key findings of the study include:

• Households that buy investments and insurance where they bank are among a retail financial institution's most profitable and desirable customers;
• ­Such customers are more likely to stay with that institution than customers with multiple banking relationships; and
• ­By under-investing in their investment and insurance services businesses, retail financial institutions are missing the opportunity to increase the stickiness of these highly desirable customers.

"I have been very excited about the opportunity for LPL Financial to sponsor this study, which was specifically designed to help institutions see the opportunity that exists from a successful and growing investment and insurance program," said Andy Kalbaugh, managing director and president of LPL Financial's Institution Services division.

"Intuitively, many executives at financial institutions have believed in the strategic importance of the investment and insurance services customer.  But until now there has not been a source of industry data to test this belief, and this appears to have led to under-investment by banks and credit unions in their investment and insurance services capabilities," added Kenneth Kehrer, Ph. D, founder of Kehrer-LIMRA and co-author of the study.

Additional findings of "The Value of an Investment and Insurance Customer to a Bank" include:

• Consumers who have purchased an investment or insurance product from their primary bank or credit union have checking account balances that are 16 percent higher than those households without a brokerage or insurance relationship; 
• ­Brokerage customers have savings account balances that are on average 85 percent higher than non-brokerage customers; and
• ­Brokerage and insurance customers have more than twice as many credit products and 11 percent more remote banking products than customers who have not purchased an investment or insurance product from their primary bank or credit union.  

"At LPL Financial Institution Services, our support and value proposition is designed to help advisors, program managers and the financial institution achieve more household penetration and grow wallet share from each and every client relationship, and is unmatched by any other provider focused on the financial institution space," Mr. Kalbaugh concluded.

LPL Financial Institution Services provides third-party investment and insurance services to approximately 670 banks and credit unions nationwide, including unbiased product expertise, proven program management, and a choice of clearing solutions – all tailored to meet the unique needs of each client.  Banks and credit unions that wish to learn more about LPL Financial's services or the potential fit within their organization are encouraged to reach out to Darlene Cain, Assistant Vice President, at (704) 733-3580 or [email protected], to identify the business consulting associate who supports their territory.

The new study draws on data from the MacroMonitor, the largest comprehensive retail financial-services and marketing database that has measured, analyzed, and interpreted consumer attitudes, behaviors, and motivations continuously since 1978.  The 2010/2011 MacroMonitor is a national sample survey of 4,374 households, with an oversample of 1,500 affluent households, reweighted to be representative of the U.S. population.  This comprehensive survey is conducted every other year by the Consumer Financial Decisions Group of Strategic Business Insights, formerly part of SRI International.

About LPL Financial
LPL Financial, a wholly owned subsidiary of LPL Investment Holdings Inc. (NASDAQ: LPLA), is the nation's largest independent broker-dealer (based on total revenues, Financial Planning magazine, June 1996-2011), a top RIA custodian, and a leading independent consultant to retirement plans.  LPL Financial offers proprietary technology, comprehensive clearing and compliance services, practice management programs and training, and independent research to more than 12,800 financial advisors and approximately 670 financial institutions. In addition, LPL Financial supports over 4,000 financial advisors licensed with insurance companies by providing customized clearing, advisory platforms and technology solutions. LPL Financial and its affiliates have more than 2,700 employees with headquarters in Boston, Charlotte, and San Diego.  For more information, please visit www.lpl.com.

Securities offered through LPL Financial. Member FINRA/SIPC

*Based on total revenues, Financial Planning magazine, June 1996-2011

LPLA-C

LPL Financial Institution Services Contact
Craig Kamis
Senior Vice President, Business Development
(704) 733-3917
[email protected]

LPL Financial Media Contact
Michael Herley
Kekst and Company
(212) 521-4897                                  
[email protected]

SOURCE LPL Financial LLC