The total number of U.S. advisors has fallen for a fifth consecutive year, dropping nearly 2%, according to Cerulli Associates.
“Advisor headcount decreased again [in 2013], declining 12% from a high of over 325,000 advisors in 2008,” said Kenton Shirk, an associate director at Cerulli, in a statement Wednesday.
Two channels, though, are seeing growth. “The registered investment advisor (RIA) and dually registered channels are the only segments that have increased headcount over this time period,” Shirk explained.
Plus, it’s like to continue to expand, as it’s done since 2008. “We project the headcount growth in the RIA and dually registered channels will continue over the next five years,” he added.
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Specifically, the market share of the RIA and hybrid channels is likely to move up from 20% of total assets in 2013 to 28% in 2018, the Boston-based research group says.
Cerulli’s report says much of the growth in these two channels has “come at the expense” of the wirehouse channel. However, these firms continue to dominate the industry in terms of assets under management and productivity.
Based on fourth-quarter figures, the wirehouses — including Morgan Stanley (MS), UBS (UBS), Wells Fargo (WFC) and Bank of America’s (BAC) Merrill Lynch and US Trust operations — have close to $7 trillion in assets under management.
And those wirehouse reps tend to lead the advisor pack in production. UBS reps have an average of $147 million of client assets and average yearly fees and commissions of $1,091,000, for instance, as of Dec. 31. Independent advisors affiliated with LPL Financial (LPLA), by contrast, had average annual production of $248,000 as of Sept. 30.
The wirehouses, Shirk says, “operate at the pinnacle of advisor productivity and remain the premier distribution partner for asset managers.”