Industry watchers say 2012 will bring market volatility to the advisor's doorstep at a time when many clients are entering their golden (read distribution) years. And all the while, bank advisors will be seeking to smooth out their own cash flows with a greater emphasis on fee-based business.

Banks have been slow to embrace fee income and recurring revenues, and even slower to let transactional business slide, according to observers. But those trends have accelerated in the past year and will continue to gain steam this year. "More fee income is a primary goal for banks for 2012, especially managed money, fee-based businesses," says industry consultant Jack Cramer. He added, "2012 is the year of advice."

Indeed, bank broker-dealer training programs are beefing up to help advisors transition from a transaction-based model to an advice-based model. And as bank advisors push further into the field of advice, their counsel will be more holistic. "Advisors can provide advice and referrals to make sure the client has planned appropriately even though they don't sell health insurance," said Cramer. That willingness signals another big shift in the industry's attitude. "Three or four years ago, we've had said, 'We don't do that.' Now we say, 'Let's talk about it and how can I help you get there,'" he added.

Other observers talked about the increased interest in products that allow advisors to annuitize their revenue streams, notably managed accounts for the emerging affluent or affluent clients. "Advisors who have been early adopters of managed accounts have fared better over the last several years in terms of client retention and annual revenue production," Dan Overbey, president of BankUnited Investment Services, writes in an email.

Even so, many observers say the focus will be less on product recommendations and more on the basics of financial planning: understanding what clients want, helping them determine their goals, and offering a comprehensive plan using a variety of products to help them get there.

Another area to come into focus in 2012 will be managing retirement income. While the alarm has been sounded for some time as the Baby Boomers ease into retirement, the calls are growing louder to pay special attention to the distribution phase. For years advisors have been in accumulation mode, helping clients save enough and invest enough to retire. Now there are a plethora of new products, new technologies and training to help advisors help clients navigate living on their wealth (see related story).

Although banks are conservative by nature, events in the financial world have dictated the need to embrace change.

"We're seeing a lot of interest in product development that mitigates risk," says Marc Vosen, president of Key Bank's investment program and outgoing president of the Bank Insurance & Securities Association.

In addition to the usual absolute return funds, popular offerings include indexed annuities, structured products and REITs—both traded and non-traded. Some structured products include structured notes—formerly only accessible to high-net-worth clients—and market-linked CDs, featuring FDIC insurance, which is still very appealing to retail customers.

"Things that used to be dismissed instantly by product directors are getting on shelves," Cramer said, adding that, "2011 was the year of getting them on the shelves, 2012 will be the year where sales accelerate."

It's not just the product managers who are fans of the new products. "Advisors are recognizing the absolute necessity to broaden their understanding of alternative products," according to Overbey of BankUnited.

However, some observers say regardless of what advisors sell, thanks to historically low interest rates, they will see a continued squeeze on commissions on traditional bank products such as fixed annuities, at both the carrier and firm level.

Overbey reports that as margins continue to erode, more broker dealers are trimming payouts to advisors. What's more, he's seeing many firms tinkering with the advisor position so it will mirror the income level of the branch managers. "This is a troubling trend," he writes in an email, "particularly for less seasoned advisors because it is an opportunistic move on the part of some bank programs in the face of a weakened employment market and domestic economy. On a more intellectual level, it's equally troubling for all advisors because of the inherent responsibility that advisors share when investing for the public."

Still, bank advisors are making progress in working more closely with the wealth and trust areas of the bank. Experts see the two worlds breaking down traditional walls, increasingly referring customers back and forth and accessing each other's product shelf to serve clients better.