February 3, 2014

IBDs Dominate Long-Term Mutual Fund AUM

ETF distribution is driving RIA growth, Access Data says

Independent broker-dealers and registered investment advisors were the largest distribution channels for long-term mutual funds and ETFs last year, according to a new report from Access Data.

Access Data, a Broadridge Financial Solutions company, reported Monday that total third-party ETF and long-term mutual fund assets under management had increased to $8.8 trillion in 2013, a 23% rise over 2012.

Specifically, 2013 data showed the following: 

  • IBDs led in overall third-party distribution of long-term mutual funds and ETFs with $2.1 trillion in assets under management, a 23% increase over the previous year.
  • RIAs were the second largest channel with slightly more than $1.6 trillion in fund and ETF assets, a 17% increase over 2012, followed by the wirehouse channel with $1.6 trillion.
  • Total assets under management for retail third-party distribution of long-term funds and ETFs represented 65% of all third-party distribution, or $5.7 trillion.
  • The institutional channels—private banks, national banks and trust companies—had combined assets under management of $3.1 trillion, or 35% of third-party distribution.

The report said the overall growth of the IBD channel, which has consistently ranked No. 1 in assets under management versus all other distribution channels from 2011 to 2013, was driven by long-term mutual funds with an increase in assets of 24% in 2013. 

This compared with an increase in long-term mutual funds for the RIA and wirehouse channels during 2013 of 13% and 14.6%, respectively.

Within the RIA channel, ETFs were driving growth as demonstrated by a 33% increase in 2013.

ETF assets for the RIA channel also outpaced the IBD and wirehouse channels last year; these experienced an increase in ETF assets of 18% and 25%, respectively.

“The independent retail channels continued on a strong growth path in 2013, and we expect IBDs and RIAs to remain the leading distribution channels of long-term mutual funds and ETFs in 2014,” Frank Polefrone, senior vice president at Access Data, said in a statement.  

“The data we gather shows that long-term funds are driving growth for IBDs, but ETFs gained a larger share of RIA asset growth in 2013.”

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Independent broker-dealers and registered investment advisors were the largest distribution channels for long-term mutual funds and ETFs last year, according to a new study.

Access Data, a Broadridge Financial Solutions company, reported Monday that total third-party ETF and long-term mutual fund assets under management had increased to $8.8 trillion in 2013, a 23% over 2012.

Specifically, 2013 data showed the following: 

·        IBDs led in overall third-party distribution of long-term mutual funds and ETFs with $2.1 trillion in assets under management, a 23% increase over the previous year

·        RIAs were the second largest channel with slightly more than $1.6 trillion in fund and ETF assets, a 17% increase over 2012, followed by the wire house channel with $1.6 trillion

·        Total assets under management for retail third-party distribution of long-term funds and ETFs represented 65% of all third-party distribution, or $5.7 trillion

·        The institutional channels—private banks, national banks and trust companies—had combined assets under management of $3.1 trillion, or 35% of third-party distribution

The report said the overall growth of the IBD channel, which has consistently ranked number one in assets under management versus all other distribution channels from 2011 to 2013, was driven by long-term mutual funds with an increase in assets of 24% in 2013. 

This compared with an increase in long-term mutual funds for the RIA and wire house channels during 2013 of 13% and 14.6%, respectively.

Within the RIA channel, ETFs were driving growth as demonstrated by a 33% increase in 2013.

ETF assets for the RIA channel also outpaced the IBD and wire house channels last year; these experienced an increase in ETF assets of 18% and 25%, respectively.

“The independent retail channels continued on a strong growth path in 2013, and we expect IBDs and RIAs to remain the leading distribution channels of long-term mutual funds and ETFs in 2014,” Frank Polefrone, senior vice president at Access Data, said in a statement.  

“The data we gather shows that long-term funds are driving growth for IBDs, but ETFs gained a larger share of RIA asset growth in 2013.”

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