Private Banks Take Up New Funds Faster than RIAs

And though RIAs are often characterized as the more open‐minded and intrepid channel, current data from Broadridge suggests private bankers are overlooked in that regard. We scoured the database for product location by channel, matched them with the age of the oldest share class (to avoid conflating new product with new wrapper), and found that private bankers are shunting more money into new products than any other channel. Think DIY-ers will help? The discount (or online) channel is near the bottom of the rankings, where many are patiently waiting for a three‐year rating before taking action. 

While private bankers are sometimes affiliated with an asset manager (such as JP Morgan or UBS), we did not find this channel stuffed with affiliated offerings. In fact, Vanguard’s new Real Estate II Index Fund was a popular choice and was part of the reason roughly 88 percent of the new products that private bankers picked up were mutual funds. That tendency to favor new mutual funds is noticeably different from that of 
RIAs, who committed about 41 percent of their new product allocation to mutual funds and the rest to ETFs. 

But before we make too many associations between private bankers and test pilots, note that 91 percent of their commitments are to funds five years and older. They may be open‐minded, but they’re certainly not pushovers.