Trust Updates Archive
(June 5, 2008--Chicago, IL)--Fiduciary institutions are eager to increase revenues, but, with the exception of large institutions, they appear a bit nervous about it, according to a recent survey by Trust Performance Report, a sister publication of TRN. The survey, taken in March, was part of TPR’s annual analysis of fiduciary assets at 1500 financial institutions.
Nearly a quarter of all survey respondents raised fees in 2007. Firms with fiduciary assets between $1 billion and $10 billion were the most aggressive. Thirty percent of these mid-tier firms raised fees.
Fiduciary institutions that raised fees in 2007 or are planning to do so in 2008 are overwhelmingly bank affiliated. According to Fiduciary Income Report 2007, another sister publication of TRN, mid-tier and small institutions charge less for their services than comparably-sized independent trust companies.
In 2008, more bank-affiliated trust institutions expect to boost fees. The charge is again led by mid-tier institutions. Nearly a third of the mid-tiers plan to raise fees, as do 27 percent of small institutions. Among large firms, 20 percent raised fees in 2007 and 18 percent will boost them this year.
Raising fees, however justified, appears to be a bit unnerving. When asked to rate their concern about reaching 2008 revenue goals, 75 percent of mid-tier firms said it was a high concern. Concern was equally high among small firms, 70 percent.
Among large firms, concern was below 30 percent.
The anxiety among institutions relates to the possibility of losing accounts. Not surprisingly, institutions expressed nearly the same level of concern about reaching new account target goals as they did target income goals.
However, over the last five years, the average size of fiduciary accounts has been increasing even as the total number of accounts has declined. The net result has been consistent asset and gross revenue growth for the industry among all peer groups.
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