05/01/2015
Large distributors will lose ground to advisers
The independent advising sector of the US market is going to steal a market on the major retail distributors. According to projections by Cerulli Associates, the combined asset marketshare of the independent advisory channels will surpass the wirehouse marketshare in the next 5 years (“Advisor Metrics 2014: Capitalizing on Transitions and Consolidation.”)"Multiple factors have contributed to the historical and expected growth of independent channels,» Kenton Shirk, associate director at Cerulli, states. «More than two-thirds of advisors indicate they would prefer the independent broker/dealer, registered investment advisor, or dually registered models if they decided to leave their current firms.""A key factor is the flexibility and autonomy inherent in the independent channel with regard to portfolio construction, operational flexibility, fee structure, and technology,» Shirk explains. «The economics can also be appealing to advisors, as payouts are higher and advisors become responsible for their own overhead decisions. Independent advisors can build long-term enterprise value in not only their own solo practice, but also in a broader business entity comprised of multiple advisors, staff, and infrastructure.»
