After suffering near-constant post-crisis turmoil and three years of losing both advisors and assets to other channels, new research from Cerulli Associates shows wirehouses have begun to stabilize while still controlling industry-leading asset share.
“While the wirehouses are not yet winning new clients, they are for the first time in recent memory retaining share of assets, including those of high-net-worth investors,” said Kenton Shirk, associate director at Cerulli, in a statement. “Wirehouse firms have reshaped their business around serving the industry’s largest and most productive advisors. These firms have positioned themselves as delivering the scope and scale of a global financial institution to affluent investors.”
While wirehouses’ market share loss of HNW investors continues, Cerulli says the pace of that loss has stabilized in the past few years. In 2007, the four New York wirehouses controlled more than half (53%) of high-net-worth assets, but by 2009 that share had plummeted to 44%, according to Cerulli’s research. The report shows the market share loss of HNW investors dropping from 43% in 2010 to 42% in 2011 to 41% in 2012, and Cerulli projects these firms to drop less than one percentage point of HNW share in 2013.
“It appears that the wirehouses’ strategy of focusing on the largest advisors has begun to bear fruit as their market share stabilizes,” Shirk adds in the statment. “The four wirehouses already boast the industry’s most significant assets under management per advisor.”
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As measured by assets under management per advisor, wirehouse advisors are 159% more productive than the average, according to Cerulli. Cerulli notes that a wirehouse practice delivers 11 different services to its clientele on average, more than the industry average of less than 10 and the highest of any channel.
Merrill Lynch advisors had the highest average yearly production, at $1.056 million in the first quarter, ThinkAdvisor reported.