Just as the Securities and Exchange Commission beefs up its oversight of dually registered advisors, new research from Cerulli Associates finds the dually registered channel is one of the fastest growing.
RIAs and dually registered advisors are the fastest growing channels, with assets under management increasing by 13% and 19%, respectively, Cerulli said Friday.
“With the asset management industry inching forward, advisor transitions, investor choice and organic growth have favored the RIA and dually registered channels,” said Tyler Cloherty, associate director at Cerulli, in a statement. “As advisors move into the RIA and dually registered channels, many new entrants will be progressively smaller, but this is contributing to significant growth within the channels.”
But Carlo di Florio, director of the SEC’s Office of Compliance Inspections and Examinations, said at the Investment Adviser Association’s compliance conference in Arlington, Va., on Thursday that SEC examiners are uncovering “a lot of challenging issues” with dually registered advisors.
The SEC listed dually registered advisors as an “emerging risk” in its exam priorities for this year.
Due to the continued convergence in the investment advisor and broker-dealer industry, the SEC said that examiners would “continue to expand coordinated and joint examinations with the BD Program of dually registered firms and distinct broker-dealer and investment advisory businesses that share common financial professionals.”