Strategy
Advisor Dislocation Is Leading To More Choice - Cerulli
When the this year's tally is made, no less than $800 billion in U.S. client assets will have switched firms in 2009 as a result of advisor migration - with wirehouses emerging as a the biggest losers and RIAs and hybrid broker-dealers reaping most of the benefit.
That's according to Cerulli Associates, a Boston-based research and consulting firm, which also sees the big-name brokerages employing just 13.7% of the total U.S. advisor by 2013, down from around 20% at last year's end.
By the end of 2012, Cerulli sees wirehouse assets under
management falling to 40.7% of the total U.S. private-client pool
from 47.7% at the end of 2008. Meanwhile, independent advisors -
long the fastest growing segment of the US financial-service
space - will accelerate to account for 39.3% of private-client
assets by 2013.
As was plain enough on the ground, Cerulli says the second half
of 2008 saw a recruiting war at the wirehouses, as the big
national firms tried to entice each other's top producers with
bonuses and other opportunities to monetize their practices. At
the same time, the big firms pink slipped low producers, creating
recruiting opportunities for independent broker-dealers.
Cerulli estimates that wirehouses’ share of assets under
management will fall from 47.7 percent at year-end 2008 to 40.7
percent by the end of 2012. At the same time, independent
broker/dealers, RIAs, and dually registered advisers are
projected to account for 39.3 percent of assets under management
by 2012, nearly even with the assets at wirehouses.
Emerging from all this movement is more choice for the advisor,
says Cerulli. Advisors now have more choices about how they can
affiliate with platform providers, what products they can offer
and how they can run -- and exit from -- their practices.