The largest third party broker-dealers that support the investment services offerings in banks and credit unions increased their revenue by 8% to more than $1.5 billion during 2012.
That's according to the 2012-2013 Kehrer Saltzman TPM Survey released by strategic management consulting firm Kehrer Saltzman & Associates LLC.
“Most of that revenue is paid to their financial institution partners,” said Kenneth Kehrer, a principal of Kehrer Saltzman in Charlotte, N.C.
Kehrer noted that historically, these broker-dealers have been called TPMs, or third party marketers, because many began as marketers of annuities and other products in banks in the 1980s.
Today, all but about 50 banks with investment services offerings rely on a TPM as the engine for their brokerage business, he added.
LPL is the largest third party broker-dealer serving banks and credit unions, producing the largest share of revenue, serving more financial institutions, and supporting more financial advisers than the other TPMs, according to the Kehrer Saltzman survey.
The financial institutions division of Raymond James Financial ranked second in revenue produced through financial institutions and in the number of financial advisers placed in banks and credit unions.
Cetera Financial Institutions, formerly PrimeVest Financial, was second in the number of financial institutions served.
Raymond James, CUSO Financial Services LP, CUNA Brokerage Services, INVEST Financial Corp., and Investment Professionals increased their share of the number of financial advisers working in the institutions served by the TPMs, according to Tim Kehrer, who managed the survey at Kehrer Saltzman.
Tim Kehrer pointed out that some TPMs gained ground on their competitors during the year.
“LPL, Investment Centers of America, Investment Professionals and INVEST Financial all increased their market share in terms of the number of financial institutions served,” he said.
Kehrer Saltzman & Associates said it conducts an annual survey of the dozen largest third party broker-dealers. The TPM survey has been conducted since 2006 and covers more than 90% of the banks and credit unions that use TPMs. The broker-dealers have increased their revenue every year since 2009, according to the firm.
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