RIA's Asset Growth Still Trails Behind Wirehouse Counterparts

Posted on December 7th, 2023 at 11:29 AM
RIA's Asset Growth Still Trails Behind Wirehouse Counterparts

From the desk of Jim Eccleston at Eccleston Law 

Registered Investment Advisors (RIAs) are experiencing a faster growth rate in numbers compared to national brokerage firms, as indicated by recent data from Cerulli Associates, but their asset levels still trail.

As of 2022, wirehouses account for 15.1 percent of advisors and 34.1 percent of asset market share, while independent RIAs have 15.3 percent of advisers and 15.7 percent of asset market share. Hybrid RIAs fall in between with 11.6 percent of advisers and 11percent of asset market share.

According to Barron’s, the RIA sector is experiencing rapid growth, primarily driven by clients' preferences for independent advisory services. Simultaneously, many advisor teams leave national brokerage firms to establish independent firms, seeking greater control over their client relationships. According to Andrew Blake, associate director at Cerulli, despite the dominance of wirehouse channels in industry assets and advisor productivity, the flexibility and higher payout percentages associated with independence are attractive.

By 2027, Cerulli anticipates that RIAs will control nearly one-third of the asset market share, reflecting the ongoing trend of advisors gravitating towards independence.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

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