A new report by Cerulli Associates has found that advisors are using fewer asset managers in their practices—with the growth of ETFs contributing to this trend.
Cerulli says that its latest report, "Advisor Portfolio Construction Dynamics," examines how advisors are building investment portfolios for their clients and the impact this is having on firms targeting these advisors.
The report also found that while the overall number of advisors has remained relatively stable, “their allotment among distribution channels has changed a bit as independent channels–IBD, RIA, and dually registered–have grown at the expense of the historically employee-focused channels.”
Cerulli also notes in its study that the Boston-based firm expects independent channels to gain “between 1% and 2% market share annually over coming years as experienced advisors continue to migrate towards independence.”
In 2008, just 37% of advisors reported regularly using five or fewer asset managers, but by 2011, this number increased to 57%, notes Scott Smith, head of Cerulli’s intermediary practice and lead author of the research, in a statement. “Despite the proliferation of new products and providers, over the last several years, we have documented the extent to which advisors are using fewer asset managers,” he says.