Trust Updates Archive

Fiduciary Assets Revenues 2011 second quarter Trusts Estates A.M. Publishing Garbo P.I.E. Index Up, New Revenue Benchmark Possible

(Sept. 28, 2011 --Chicago, IL) --Fiduciaries are generating more revenues in 2011 thanks to a better than 8 percent growth in traditional trust assets: personal trusts, investment management agencies, and employee benefit accounts (P.I.E.), according to Trust Performance Report 2011.

While custody accounts dominate industry assets, traditional fiduciary accounts are the industry's revenue generators. Dollar for dollar, P.I.E. assets generate 9 times as much revenue as custody. On average, it takes $8,200 of custody assets to generate $1 of gross revenue. However, it only takes $890 of P.I.E. assets to do so.

Based on revenues for the first six-months of 2011, TPR projects 2011 gross fiduciary revenues at $32 billion, possibly higher assuming continued growth in P.I.E. assets. The industry's revenue record of $33.6 billion was set in 2008; gross revenues trail asset growth.

To reach gross revenues of $33.6 billion, P.I.E. assets for the industry would need to increase nearly $1 trillion over 2010 levels, with custody assets simultaneously increasing by more than $7 trillion. This translates to an asset growth in P.I.E. of nearly 9 percent and custody asset growth of just over 10 percent. In the first half of 2011, P.I.E. assets grew by over 8 percent, primarily in employee benefit accounts. Custody assets, in the same time period, grew only 5 percent. Respectable growth rates, but they fall short of growth needed to set a new benchmark. However, asset growth in combination with renewed efforts to enhance revenue, suggests record revenues could be reached in 2012.

Enhancing Revenue

In March 2011 polling, 1 in 4 fiduciaries were planning to raise fees, but 8 out of 10 were planning to "enhance" revenue. Revenue enhancement, say industry consultants, encompasses more than raising fees. Institutions, they say, can "squeeze out additional revenue" without raising rates by tighter policing of existing fee schedules.

When considering revenue enhancement options, industry and peer benchmarks are an essential decision-making tool. Fiduciary Earnings & Expenses 2011, a sister publication of Trust Performance Report, provides peer earnings and expense data. FEE 2011 analysis includes comparison of performance data of independent trust companies to that of bank trust divisions. For more information on FEE 2011, go to

Asset Growth

Overall, sustained industry asset growth, especially in custody and employee benefits accounts, pushed total fiduciary assets to $92.4 trillion, a new record. Better than 3 in 4 institutions reported asset growth, with nearly 25 percent of institutions reporting double the industry's weighted average.

Trust Performance Report 2011's annual data book (published in May) provides both industry and peer group performance data by assets, gross revenue, net income, and account category; subscribers receive quarterly updates. TPR findings are based on its annual survey of the top 1500 fiduciary institutions.

For more information on Trust Performance Report 2011, including how to order, Click Here

No statement in this issue is offered as or should be construed as legal opinion or advice or as an indicator of future performance.
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