Trust Updates Archive
(May 29, 2013 --Chicago, IL) -- Viewed in aggregate, trust data suggest an industry hesitant to push for revenue. On closer inspection, it appears the Top 50 have been holding the industry back, according to TRUST PERFORMANCE REPORT 2013, TRN’s sister publication.
Gross revenues for the industry at large have risen very slowly since the “Great Recession.” Compared to 2007, the Top 50, which generate better than 86 percent of total gross revenue, have seen total revenues decline by 2 percent. Meanwhile, the Bottom 450 reported a 33 percent spike in gross revenue. In dollar terms, the Top 50 trust institutions lag by nearly $500 million, while midtier and small institutions are ahead by more than $1 billion.
If double-digit revenue growth rates are any measure, then small and midtier trust institutions have been working very hard the last six years.
Not until 2010 did the Top 50 initiate a more aggressive push to increase revenues. Over the last four years, the Top 50 have seen revenues increase by 17 percent. Small and midtier institutions nearly doubled that performance in percentage terms.
In TRUST PERFORMANCE REPORT’S Annual Survey of Trust Assets over the last three years, more large institutions than midtiers or small ones indicated they planned to raise fees. However, fewer followed through.
In the 2012 survey, 60 percent of large institutions indicated they planned to raise fees. In 2013’s survey, only a third had followed through. Just under half of small and midtier institutions signaled an intent to raise fees. Of those, nearly half followed through.
The Top 50 dominate in sheer size, but the Bottom 450 dominate in their focus on P.I.E. The difference is significant because of the higher revenues that P.I.E. accounts generate.
This division in focus is not news. However, the fact that the Bottom 450 have surpassed 2007 gross revenue levels, while the top institutions lag, is.
In 2012, total assets grew by an industry weighted average of 10%; among the largest institutions, assets grew by only 4%. Gross revenues were up by a weighted average of 7%; lower again among the largest institutions: 2%.
Trust Performance Report 2013’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 best practices and benchmark data see Trust Performance Report 2013. For information on ordering Click Here or the link below.
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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