The latest version of Investment Executive’s Report Card on Banks and Credit Unions finds that the average retail advisor at deposit-taking institutions is facing diminished assets under management and handling smaller accounts.

And although it could be assumed that consumer retribution for the banks’ role in the financial crisis may be a reason, it appears that the prime suspect for bankers’ woes may be rock-bottom interest rates.

Whatever the cause, there’s no denying that bankers appear to have had a tough year. The average advisor in this year’s survey reports that AUM is down a bit — to $47.4 million from $49.2 million in 2009.

Even more striking is the shift that has taken place in client account distribution. Advisors are reporting a big swing within their books toward smaller account sizes. Last year, the average advi-sor reported that 24.2% of his/her book was composed of accounts in the $250,000 to $500,000 range. This year, this segment makes up only 19.2% of the average book.

There has been an even bigger fall-off in the $500,000 to $1 million segment. Last year, that category accounted for 18.5% of the average advisor’s book; this year, the allocation in this segment has been more than halved, to 8.7%. And the exposure to the very biggest accounts is down just as dramatically, albeit from a lower starting level. Now, the average advisor reports that just 4.5% of his/her book is made up of accounts larger than $1 million, which is down significantly from 13.2% last year.

As a result, account distribution is now skewing sharply toward the lower end of the AUM spectrum, with accounts worth less than $100,000 representing 36.1% of the average advisor’s book, up sharply from 23.6% in last year’s survey. Similarly, accounts in the $100,000 to $250,000 range now represent 31.5% of the average book, up from 20.5% in 2009.

These same trends are evident among both the top advisors in the business (as measured by AUM per client household) and the rest of the industry. The top 20% of advisors are also seeing their account distribution skew toward smaller accounts generally. Last year, the $500,000 to $1 million range represented the largest chunk of these advisors’ books, at 30.9%. This year, the share for accounts of that size is down to 19.7%. The $250,000 to $500,000 range is now the largest single segment of their books, representing 33.4% of accounts vs 28.1% in 2009.

To be sure, the top advisors have seen their share of the smallest accounts tick upward, rising to 6.9% from 4.6%. But the big jump for them, as for the channel overall, is in the $100,000 to $250,000 segment of their accounts, which saw its share of book rise from to 25.6% just 12.1% last year. At the same time, allocations to accounts worth more than $1 million is down to 14.4% from 24.4%.

For smaller producers, the shift to smaller accounts may not be quite as jarring, as accounts worth less than $100,000 were already the biggest portion of their books, at 29.6% in last year’s survey. This year, that share of book is up to 37.2%.

Again, the biggest gain in any segment for these advisors was in the $100,000 to $250,000 range, which saw its share of the average book rise to 35.1% from 22.9% year-over-year. Rather than reflecting the emergence of increasingly higher-end books, the growth in this segment may be coming at the expense of higher-value accounts. For the lower-producing advisors in the channel, the portion of their books allocated to accounts worth more than $500,000 is now down to 10.2% from 24.9% a year ago.

@page_break@There is a caveat about these year-over-year comparisons for the top 20% of bankers and the rest of the industry: a revision to the survey methodology, in terms of how client households are measured, has lowered the reported number of client households served in this year’s survey. That means that the reported number of households served by the average advisor at the banks and credit unions this year is not directly comparable with the number reported last year. And, as a result, a valid year-over-year comparison of advisor productivity (as measured by AUM per client household) is not possible, either.

We still use that productivity metric to split the top 20% from the rest of the industry, but the advisor populations aren’t as precisely comparable as if the methodology had not changed. That being said, the same trends we observe within these populations are evident in the overall averages, which are not impacted by the change in methodology.

Moreover, the fundamental differences between the top 20% of advisors and the other 80% are clearly persistent from the previous survey to this one, suggesting that comparisons remain valid in general.

For example, in last year’s survey, the top 20% of advisors reported getting a notably smaller portion of their compensation from salary and a greater share from bonuses, when compared with the rest of the industry. That difference remains today, with the top 20% reporting that they now derive 60.5% of their compensation from salary vs 79.9% for the rest of the channel. Also, the top 20% now get 27% of their compensation from bonuses vs 14.6% for the rest of the industry.

There wasn’t much change overall from year to year in the sources of compensation reported by advisors — apart from modest rises in their reliance on salary and bonuses and drops in asset- and fee-based sources.

But there were some significant shifts in product distribution within their books. Notably, advi-sors’ use of mutual funds jumped, whereas their allocations to traditional savings products such as guaranteed investment certificates and high-interest savings accounts dropped.

In last year’s survey, mutual funds and GICs enjoyed fairly similar allocations in the average advisor’s book: 38% and 33.6%, res-pectively. However, after a year of near-zero interest rates, asset allocations have now swung sharply toward mutual funds, as they now represent 48.7% of the average advisor’s book while GICs have slumped to 27.8%. Similarly, high-interest savings accounts are down to 2.7% of the average advisor’s book from 7.9% last year.

These basic trends are evident among both the top 20% and the rest of the industry — although they are being driven most clearly by the remaining 80%. Although mutual fund allocations have ticked upward for the top advi-sors, they have soared among the rest of the industry, to 55.8% from 38.5%.

Similarly, the use of GICs by lower-producing advisors has dropped more sharply than it has among the top advisors, falling to 23.8% from 33.4%. With interest rates so low, it’s no surprise that clients have pulled their money out of these products. IE