RIAs Continue to Gobble Up Wirehouses' Market Share: Cerulli

Global analytics firm Cerulli Associates projects that the independent registered investment advisor (RIA) and hybrid RIA channels combined will increase their asset market share from 23% in 2015 to 28% in 2020 – likely outpacing wirehouses.

In 2015, according to Cerulli, the independent RIA channel grew assets faster than any other advisor channel (6.2% growth versus an average of 0.9% for all channels). Meanwhile, the wirehouse asset base shrunk 1.9% in 2015, ranking as the poorest-performing advisor channel in terms of asset growth.

“While wirehouses still hold a substantial share of assets, RIAs are the growth story,” Kenton Shirk, associate director at Cerulli, said in a statement. “To build a relationship within an independent practice, wholesalers need to truly understand a firm’s investment philosophy and decisionmaking process.”

This data is from Cerulli’s latest report, U.S. Intermediary Distribution 2016: Evolving Roles in Distribution, which also analyzes trends related to advisor product use, portfolio construction and allocation changes across industry segments.

The research reports that asset managers have identified registered investment advisors (RIAs), broker-dealer (BD) mega-teams and home-office due diligence relationships as the groups with the largest pockets of opportunity to generate revenue and increase market share.

These channels are also leading the trend toward more sophisticated, investment- and data-focused interactions that have traditionally been reserved for firms operating within the institutional space.

“In our survey of national sales managers, 67% rank increasing the technical skills of existing wholesalers to address more sophisticated advisor teams as the top priority,” Emily Sweet, senior analyst at Cerulli, said in a statement. “We believe this expanding institutional influence in the retail market, especially in the areas growing most quickly, will continue for the foreseeable future.”