Will Banks Miss Their Brokers?

Citigroup's decision to convert their in-branch brokers to fee-based advisers (see preceding post) draws approval from Reuters' Matthew Goldstein.

Will other banks bow to threats of legislative or regulatory action and follow suit? To borrow a phrase from one commentator, are "guys who are transactional" an endangered species?

Such a change could impact bank earnings. As mentioned here last year, bank brokerages have been highly profitable. That's partly because the mass affluent tend to be less sophisticated, less cost-conscious. As Robert Frank notes in The Wealth Report, millionaires get the better deals.