As banks “continue to open their platforms,” there are significant opportunities for asset managers – particularly those with strong equity strategies, according to Donnie Ethier, associate director at Cerulli Associates.

As banks “continue to open their platforms,” there are significant opportunities for asset managers, particularly those with strong equity strategies, according to Donnie Ethier, associate director at Cerulli Associates.

Cerulli believes that some $5 trillion held at private banks and within trust organizations is well within the reach of many asset managers, as the appetite for domestic equity continues to grow.

“Some banks will never completely embrace external solutions, mainly due to vast asset management arms and proprietary fund lineups,” Ethier said in Cerulli's Asset Management Opportunities in Banks: Trust Departments and Cross-Platform Opportunities report. “Others are reacting to the competitive pressures to offer a wider variety of funds and fund families.”

“The rate of implementation of open architecture varies widely from bank to bank,” Ethier added. “One-third of banks are considered completely open. Open architecture is likely to win out, as most advisors and trust officers want to avoid proprietary solutions. But, many banks may still resist a complete transformation.”

Cerulli said it found that most banks are “reluctant to accept reduced profit margins,” while others deem non-proprietary funds more expensive due to performance reporting and advisory fees.

“Many asset managers are now organizing their efforts around 'mapped assets,' or banks that are visibly using third-party managers,” the Boston, MA-based firm said.

The insights come amid heightened industry conversation around the topic of outsourcing operations to cope with rising costs and increased client demands that have arisen since the financial crisis of 2008.