Bankers agree that the retail investment business is a growth engine for financial firms, but that doesn’t necessarily translate to riches for the frontline advisor.

Speaking Tuesday at Scotia Capital’s financial services conference, various bank executives touted the opportunities in retail investments. CIBC’s CEO, John Hunkin, said that he sees the greatest growth potential in retail banking and wealth management.

Hunkin said that the central elements of CIBC’s wealth management strategy are distribution and segmentation. “We have built our fully registered capability in Wood Gundy and Imperial Service from 700 advisors to more than 2500 advisors,” he said. “This is critical since these sales forces line up against more than 80% of the opportunity in the market place.”

Once you have the clients, the goal is segmenting them for profitability. Hunkin said that about 15% of its branch banking customers are segmented and serviced by its 1,200 branch-based Imperial Service advisors. “This allows them to advise on — and sell — a wide range of CIBC solutions, as well as non-proprietary products such as fixed income, equities and third-party mutual funds,” he said. “Our approach is working,” Hunkin insisted, reporting that CIBC has grown funds managed per financial advisor by more than 25% over the last three years, and revenue per financial advisor is up 49% over the same period.

Growth in wealth management distribution profitability will reflect the growth in the marketplace, Hunkin said. “Incremental profit growth potential lies in greater penetration of our sales forces by proprietary product, utilizing both internal and independent money managers – buying wholesale and selling retail.”

Hunkin added that CIBC’s goal is to generate the fastest profit growth in wealth management within Canada over the next five years.

His views on the importance of retail was echoed by other presenters. TD Bank CEO, Ed Clark, said that its strategy for growing the wealth management business is first to gather assets, and then make those assets work more to increase revenues. This means winning more of the client’s wallet and shifting from a reliance on trading revenue to fees. But the real profit improvements, Clark suggested, come from relentless cost cutting.

Clark said that TD has been focused on growing its retail brokerage business, but that this doesn’t necessarily translate to profit improvements because the firm has to spend as much to grow the business as it adds.