A recent survey paints a portrait of the typical equity investor that looks a lot like the profile of a typical bank brokerage customer.
According to a study released last week by the Investment Company Institute and the Securities Industry Association, the typical investor in individual stocks and equity mutual funds is 47 years old, has a household income of $60,000, and total household financial assets of $85,000. And the typical investor has long-term financial goals.
Conducted by Boston Research Group, the survey contacted 4,842 randomly selected households in January and February. Of these, 2,336 reported owning equities and participated in the survey. Most respondents -- 64% -- said they seek advice from financial professionals when buying and selling equities.
The similarities between this investor profile and the average bank brokerage customer were not lost on bank executives.
A lot of investors are saving for retirement, said Mike Mortensen, president and chief executive officer of PNC Brokerage, a unit of Pittsburgh-based PNC Bank Corp. He said he has seen an increase in this type of investor at PNC.
"As people gather more assets," he said, "they're not comfortable with their ability to manage their own portfolio." Mr. Mortensen said investment advice is key to PNC's approach.
Merritt Talbot, president of the brokerage unit of New Orleans-based Hibernia Corp., said his company tries to appeal to older bank customers by offering financial counseling as well as a range of conservative investment products.
Bank brokerages have a demographic advantage, so the most important thing they can do is make sure bank customers know what is available, said Ellen H. McKay, a principal of Optima Group, a consulting firm in Fairfield, Conn.
"A lot of the banks we work with, their clients just don't know" about the bank's investment offerings, Ms. McKay said. "The best opportunity is always an existing customer base," she said, but since fewer customers actually go into branches, banks need to be more aggressive in promoting their brokerages to clients.
That's just what the brokerage unit of First Tennessee National Corp. does.
"You have to market to the entire universe, but you tend to concentrate your dollars on what's going to be profitable to that business," said Paul Mann, president of Memphis-based First Tennessee Brokerage Inc.
For First Tennessee, that means targeting 47- to 55-year-olds with direct-mail and print advertisements and supplementing the firm's brokers with special financial planning and retirement centers.
And customers need to know they have access to a financial adviser.
"There's still a large segment out there who want to depend on a professional who does it every day," Mr. Mann said.