Affluent Investors Are Wary of Banks: Cerulli

What You Need to Know

Wealthier investors in the U.S. believe their assets are safe but have shaky confidence in banks, according to Cerulli research.
Nearly half of investors with $100,000 to $250,000 in assets say a bank is their primary financial service provider.
This percentage trends downward with increasing wealth and is lower among older investors.

Affluent U.S. investors, those with more than $250,000 in investable assets, remain confident that their own assets are safe but are wary of the banking segment overall, according to a new study from Cerulli Associates.

Twenty-eight percent of affluent households in the study reported that they use a bank-related platform as their primary financial services provider: Eighteen percent rely on bank advisors, 7% rely on depository programs and 3% work with private banks.

Among households with $100,000 to $250,000 in investable assets, 43% of investors partner with bank providers as their main financial services option. Cerulli noted that these clients’ assets would be fully covered under programs provided by the Federal Deposit Insurance Corp. and the National Credit Union Administration.

However, they are also most likely to have immediate funding needs that comprise a major portion of their liquidity. Thus, diversifying their provider use could be well warranted, especially in periods of banking segment uncertainty.

According to the study, reliance on banking providers trends downward with increasing wealth and is lower among older investors. Overall, bank platform use peaks among those in the 30-to-39 age cohort, with bank advisor use gaining share from bank deposits and direct channels.

After age 40, investors begin moving to advisors they consider more sophisticated and comprehensive in the wirehouse, independent or full-service channels, or as their confidence increases, they take more active roles in their portfolios at direct platform providers.

Cerulli said it behooves banks seeking increased success in the wealth management segment to make retaining these aging, increasingly wealthy clients a crucial strategic priority.

Shaky Confidence

A week after the collapse of Silicon Valley Bank and closure of Signature Bank in early March, Cerulli’s survey partner, MarketCast, polled 1,000 affluent investors to learn of their perception of both the institutions they use and the banking system overall.