As most advisors are well aware, there are a ridiculous—and growing—number of surveys/studies/research reports about the advisory industry published each year. Each one seems to be longer and more complex than the last one.
Just reading and deciphering them all would be a full-time job (I should know; I regularly analyze many of them). So when a new study comes out that is concise and to the point, it stands out from the crowd. When it provides new insight into one of the major trends in the financial services industry, it’s, well, worth writing about.
I’m talking about the “2013 AdvisorBenchmarking All-Channel Study,” which was released last month by WealthManagement.com. The study polled some 2,400 financial advisors “across all channels,” identifying trends among “top performing advisors” (based on growth in AUM and profitability), and more importantly, differences between various advisor channels. Even with only a few data points, those “differences” reveal why the ranks of RIAs are growing, while most other advisor groups are shrinking.
You may recognize AdvisorBenchmarking as the publisher of an annual report on trends in the RIA industry. The 2013 study was expanded to explore trends across all major segments of the advisor world, which break down as follows: 38.2%; Wirehouse/Regional RRs; 27.7% Independent B/D RRs, 16.6% RIAs; 11.2% Insurance RRs; and 6.6%.Bank RRs.
Across all channels, the study showed all advisors fared well in 2012 vs. 2011: with an 11% increase in average AUM from $37 million to $41 million, which is understated by the $20 million AUM in insurance firms. In addition, 87.8% of the advisors surveyed said their compensation increased while “one quarter of the advisors earned compensation of more than $250,000.” What’s more, in aggregate, the advisors said they gained six times as many clients as they lost.