New research by Cerulli Associates says that the fastest growing advisor channels are the ones with the most independence, registered investment advisors (RIAs). The biggest growth, the study says, has been among dually registered advisors–those with a broker/dealer affiliation and their own RIA for providing fee-based advice.
The new research, Intermediary Markets 2007, says the independent advisory channel has grown from approximately $950 billion in 2005 to more than $4 trillion at the end of 2006. The biggest growth, the study reveals, has been among dually registered advisors, those with a broker/dealer affiliation and their own RIA for providing fee-based advice. “The growth of the dually registered advisor is due to advisors starting their own advisory firms while maintaining a broker/dealer affiliation,” the research says. “However, they are retaining their broker/dealer affiliation as an intermediate step if they still have 12b-1 income or commission-oriented products on their book.”
The study goes on to say that “after growing comfortable with the independent advisory model and frustration with multiple levels of regulation, this is usually followed by an ultimate shift to pure independence.”