Cerulli Associates’ latest research report, entitled “Advisor Migration: The Changing Landscape
of Retail Distribution,” estimates that $800 billion could be transferred in 2009 as a result of advisors changing firms.
Wirehouses should lose the most, while RIAs and hybrid advisors are likely to be the greatest recipients of this money in motion.
“With high attrition rates and assets per advisor, we expect wirehouse firms to suffer the most: a net loss of $188 billion going to other channels. Insurance and regional channels are expected to lose $13 billion and $6 billion respectively. RIAs and dually registered advisors will receive the largest share of these assets”, explains Scott Smith, lead analyst on this report.
The report also forecasts the size of advisor channels to year-end 2012. Its proprietary model quantifies the shift towards indepdendence, and estimates the size of these channels relative to the wirehouses that have long dominated the top spot in terms of advisor headcount and assets under management.
“We project that wirehouses will account for only 13.7% of the advisor headcount by year-end 2012. This is down from 20% at year-end 2008. While this represents a significant loss, we expect that the wirehouse advisor of the future will be relatively more productive, resulting in a highly effective and profitable salesforce,” says Smith.