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April 19, 2016 at 10:53 AM
Wirehouses and banks control nearly three-quarters of all high-net-worth assets in the United States, according to a new report from global analytics firm Cerulli Associates.
“As of year-end 2014, wealth managers controlled approximately $8 trillion in HNW and ultra-high-net-worth (UHNW) client assets,” Donnie Ethier, associate director at Cerulli, said in a statement. “The longtime market leaders – the wirehouses, private banks and trust companies – have maintained their reign with a collective market share of 72%.”
According to Cerulli’s report, High-Net-Worth and Ultra-High-Net-Worth Markets 2015: Understanding and Addressing Family Offices, just 0.84% of all households are HNW, but these households control 35% of all investable assets.
While wirehouses, private banks and trust companies remain the three largest HNW channels, other channels are making gains, Cerulli reports.
The growth of the private banks (11%) and trust companies (7%) has not kept pace with the industry’s average growth over the last year, according to Cerulli.
And while the wirehouses have kept pace (14%), so have broker-dealers, multi-family office (MFOs) and registered investment advisors (RIAs).
Ethier notes that this change in annual growth may not necessarily mean a loss of assets.
“Wirehouse assets lessened from past years; however, this is not always due to a loss of assets,” Ethier said in a statement. “Instead, it can be due to a change in Cerulli’s methodology, including redistributing a wirehouse’s assets to an affiliated channel. An example is separating U.S. Trust’s marketshare from Merrill Lynch.”
What’s perhaps “most threatening” to these traditional leaders is that Cerulli expects the growth of multifamily offices and RIAs to outpace the wirehouses and particularly banks over the next five years.
Cerulli anticipates providers’ control of HNW assets to expand by 7.3% by 2019. Meanwhile, multifamily offices and RIAs are expected to be amongst the greatest winners with 10% and 9%, respectively.
