As RIAs continue to capture more market share, asset managers and fund companies are planning to fill out their sales teams in order to capture the lucrative market.
Cerulli’s data expects RIAs to be managing 28 percent of the investment market by 2018.
Asset managers increased the headcounts for their RIA-specific sales teams by 17 percent between 2013 and 2014, and 42 percent are saying they plan to increase their firepower this year, specifically for targeting the RIA channel, according to a new survey from kasina, a data provider for the financial services industry.
Long regarded as a tougher sell for fund companies because of a more sophisticated approach to managing money, RIAs are doing business with fewer asset managers, according to the study.
“Diversity within the RIA channel has long made it a challenge to prospect, and the disparities continue to increase,” says Tracy Needham, a senior analyst for kasina and the author of “Debunking Four Myths to Selling to RIAs.”
“Practices now range from one-man shops to firms large enough to rival the wire houses while investment approaches run the gamut. Meanwhile, there’s no home office to serve as a conduit and the ranks of breakaway and dually-registered advisors continue to swell,” said Needham.
Needham interviewed 150 RIAs to gauge their expectations of asset managers and their sales teams, which the study says average 11 people, working internally and externally with RIAs.
The bottom-line of the study’s findings? RIAs crave details.