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USD5trn held at private banks and trust organisations is addressable by asset managers 


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More than USD5 trillion held at private banks and within trust organisations is addressable by asset managers, according to research from Cerulli Associates.



"Banks continue to open their platforms," says Donnie Ethier, associate director at Cerulli. "This provides great opportunities for asset managers, especially those with strong equity strategies, as the appetite for domestic equity continues to grow."


 
In its most recent report, Asset Management Opportunities in Banks: Trust Departments and Cross-Platform Opportunities, Cerulli focuses on investors, asset managers, and banks.
 
Particular attention is given to best-practice banks that have centralised the investment decision-making process across all of their platforms, including defined contribution record-keeping, broker/dealer, liquidity management, and trusts.


 
"Some banks will never completely embrace external solutions, mainly due to vast asset management arms and proprietary fund line-ups. Others are reacting to the competitive pressures to offer a wider variety of funds and fund families," Ethier says. "The rate of implementation of open architecture varies widely from bank to bank. 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's research finds that most banks are reluctant to accept reduced profit margins, while others emphasise non-proprietary funds as more expensive due to performance reporting and advisory fees. Many asset managers are now organising their efforts around "mapped assets," or banks that are visibly using third-party managers.

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