There are a lot of projections that the independent space is going to earn market share more broadly and the wirehouses are going to go “sideways to down,” according to Matt Brinker, head of national partner development at United Capital.
Brinker pointed to research that Envestnet compiled in April of industry trends. Envestnet’s research projects that wirehouses will continue to lose market share into 2021, while regional firms and RIAs are forecast to gain share.
The research looks at both historical and projected market share of client investment assets across industry segments. In 2013, 38% of the market share was in wirehouses. By 2016, the wirehouses’ market share had dropped slightly to 36%, and by 2021 it’s projected to drop further to 33%.
Comparatively, the Envestnet research finds that the market share of IBDs and RIAs has increased slightly and will continue to do so. In 2013, 13% of the market share of assets was in IBDs and RIAs respectively. By 2016, the percentage of market share for both of these industry segments had increased to 14% each. BY 2021, the research projects that 14% of the market share will be in IBDs and 15% in RIAs.
However, Brinker is not buying it.
“I don’t fundamentally believe that” wirehouses are approaching their demise, he said.
Brinker sat down with ThinkAdvisor during a recent visit to New York to discuss why he’s less worried about robo-advisors and more worried about the wirehouses.
According to Brinker, though, the wirehouses are doing “just fine.”
“We’ve been forecasting this death and the demise of the wirehouse for 20-plus years. If you go back and look at their quarter-over-quarter performance, profits, revenues, they’re at all-time highs.”
For example, Merrill Lynch and Morgan Stanley reported record first-quarter revenue, Brinker pointed out during a recent presentation at In|Vest conference in New York.