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October 02, 2012 at 10:11 AM
The number of wirehouse advisors and their asset base continues to shrink, says a report released by Cerulli Associates on Monday. Still, it remains the largest and most dominant channel in the industry.
There were about 51,750 wirehouse reps as of year-end 2011, according to Cerulli, down from 56,900 in 2007. That’s a four-year compound annual decrease of about 2.5%. From 2010 to 2011, though, the wirehouse channel added about 700 advisors for a one-year growth rate of 1.4%.
This year’s study, the consulting group notes, included input from 6,000 advisors across a variety of FA channels, up from 1,500 in past years.
“These survey findings indicate a shifting advisor base between channels, with a lot of activity moving away from the wirehouse firms,” said Bing Waldert, director at Cerulli Associates of Boston, in a statement.
Cerulli attributes some of the cause for the shift between channels to merger activity among the large wirehouse firms—a la Morgan Stanley and Smith Barney—which has led to restructuring. Plus, the strong growth in the RIA channel has caused a shift in focus from wirehouses to RIAs.
Nonetheless, wirehouse advisors’ market share is dominant: Reps in this channel managed about 41% of total assets in 2011. This figure could drop to about 39% this year and 36.5% in 2013.
