The Cerulli Report U.S. INTERMEDIARY DISTRIBUTION A Holistic Approach to Wholesaling

Transcription

1 The Cerulli Report U.S. INTERMEDIARY DISTRIBUTION 2018 A Holistic Approach to Wholesaling Overview & Methodology In its sixteenth iteration, this annual report focuses on the distribution of investment products through financial advisors, providing a sourcebook to asset managers seeking to maximize product distribution through intermediaries across all channels in the U.S. The report includes 10 years of market sizing of advisor-controlled assets by channel, rankings of the industry s largest distributors, and forward-looking projections of marketshare by channel. It provides comprehensive data on advisor portfolio construction practices and product use trends. And it provides benchmarking and competitive insights related to asset manager distribution strategy, staffing structure and compensation, distributor relationships, and wholesaling strategy. Data for this report is compiled from annual proprietary surveys, with responses from over 2,000 advisors, as well as asset managers, national and divisional sales managers, heads of key accounts, key accounts managers, and wholesalers. Data from this report also comes from interviews with distribution leaders and broker/dealer executives, along with various partnerships and associations. Benefits y Examine the changing points of influence over advisor portfolio construction decisions y Uncover the effects that platform rationalization and fee-pressure have had on relationships between asset managers and broker/dealers y Understand the importance of effective coordination between the different arms of distribution (e.g. sales, key accounts, product specialists, etc.) to maximize opportunities at key partner firms y Gain insight into the actions that asset managers are taking as channel lines blur and advisor clients become more sophisticated Questions Answered y What is driving trends of de-channelization? y How are asset managers staffing their teams to better engage with advisors? y How are advisors using models provided by home offices and asset managers? SUBSCRIPTION DETAILS $19,000 PURCHASE INCLUDES y Digital copy and hardcopy in color y Online access to 19 related reports y Unlimited online firm-wide access y Exhibits in Excel y Key findings y Analyst support y Interactive Report Dashboards NEW y Executive Summary Video NEW RESEARCH INCLUDED WITH SUBSCRIPTION y 13 years of The Cerulli Report U.S. Intermediary Distribution y State of Wholesaling: Transforming Distribution 2010 y Market Update: RIA Channel Sizing and Assessment 2009 y State of the Wirehouses 2009 y State of Independent Broker/Dealers 2008 y Registered Investment Advisors 2007 y State of Wholesaling: Next-Generation Coverage Models 2006 For more information, contact us: ANNUAL 187 PAGES 142 EXHIBITS ``info@cerulli.com y How is distribution in the registered investment advisor channel evolving? y How are costs affecting relationships between asset managers and partner firms? Cerulli Interactive Report Dashboards Experience Cerulli s digital analytics platform and explore interactive data from this report We are pleased to include these interactive report dashboards with your subscription: 1. Advisor In-Depth Focus: Review a detailed analysis of the advisor market, including marketshare of advisors and assets by channel, advisor productivity index, and average advisor assets under management (AUM) for seven different channels over the past 10 years. 2. Advisor Focus Firms: Discover advisors top-10 focus firms along with their associated branch concentration, headcount, productivity index, total AUM by channel, and AUM per advisor. 3. Products and Portfolios: Understand portfolio construction strategies and processes, as well as current and projected product mix filtered by channel, core market, and practice AUM. 4. Distribution Dashboard: Gain insight into expected changes in resource allocation by channel, reasons advisors choose an asset manager, salesforce headcounts, and a breakdown of compensation between key accounts managers and wholesalers. 5. Wholesaler and Advisor Relationships: Analyze what advisors and wholesalers consider to be the most valuable offerings, resources, and firm communications provided by wholesalers to advisors. NEW CERULLI ASSOCIATES info@cerulli.com

2 What are Interactive Report Dashboards? As part of your Cerulli report subscription, we are pleased to provide you with Interactive Report Dashboards that allow you to interact with report data in unique ways: ACCESS Access consolidated data from multiple report exhibits in a single comparative view. FILTER DATA Apply filters to Cerulli report analyses including assets under management, net new flows, product type, channel, year, marketplace, and currency. EXPORT Easily build and export custom charts. Export options include; Excel, PDF, or image file. My Account: Joe Q. Sample How to Access Interactive Report Dashboards This service is complimentary and is accessible through our website. Use your unqiue Cerulli website login credentials, and you will find a View Interactive Report Dashboards link to this platform under My Reports. Interact View Dashboard You can also jump to related Interactive Report Dashboards in the report PDF by clicking on the Interact button shown on the left for reference. USER LOGIN To obtain online access, please visit or contact our account management team at: ``info@cerulli.com ` ` CERULLI ASSOCIATES info@cerulli.com

3 Chapter 6 Bank Wealth Management Services, Access, and Fees Exhibit 6.06 Banks Top Reasons for Creating or Acquiring an eria/robo-advisor, 2018 Sources: Cerulli Associates, in partnership with the Investments & Wealth Institute (formerly IMCA) and the Financial Planning Association (FPA ) Analyst Note: Data reflects private banks and trust companies that are actively considering creating or acquiring an eria/robo-advisor. To acquire intellectual capital and technology and To enter new geographical markets were options, but were not selected. Participants were allowed to select more than one response. 90% 87% 75% 67% 60% 45% 40% 40% 30% 15% 27% 20% 20% 0% To engage the next generation of investors, including heirs of current clients To service less profitable and/ or smaller accounts To increase fee revenues To complement our existing service menu To obtain greater walletshare of existing clients To reach "underbanked" households To provide advisors/ trust officers warm leads once assets are accumulated 114 The Cerulli Report U.S. Private Banks & Trust Companies 2018

4 : Expanded Key Questions Answered What is driving trends of de-channelization? How are asset managers staffing their teams to better engage with advisors? How are advisors using models provided by home offices and asset managers? How is distribution in the RIA channel evolving? How are costs affecting relationships between asset managers and partner firms? Which advisor channels grew the fastest? Chapter 1: Wholesaling: Cultivating a Holistic Approach Blurring Channels...24 Exhibit Main Influence on Portfolio Construction Process, Home-Office Influence...25 Exhibit Impact of Product Rationalization, De-channelization Exhibit B/D Coverage Model, Similar Behavior, Differing Resources Exhibit Current Channelization of B/D Salesforce, Exhibit Most Valuable Resources by Channel, The Rise of Financial Planning Exhibit Advisor Perspective: Value of Wholesalers Providing Advanced Financial Planning Techniques, Getting Smarter Exhibit Plans to Increase Technical Skills of Existing Wholesalers, The Value of Partnership...30 Exhibit External Wholesalers: Strength of Internal Wholesaler Partnerships, Building Solutions Exhibit Expected Sales Headcount Change, 2020E...32 Exhibit Advisor Time Allocation by Core Market, Growing the Business...34 Exhibit Wholesaler Perspective: Value of Advanced Financial Planning Techniques Provided to Advisors, The Cerulli Report U.S. Intermediary Distribution

5 Chapter 2: Advisor Sizing Exhibit 2.01 Part 1. Description of Advisor Channels, Exhibit 2.01 Part 2. Description of Advisor Channels, Exhibit 2.02 Part 1. Overview of Advisor Channels, Exhibit 2.02 Part 2. Overview of Advisor Channels, Exhibit Assets by Intermediary Segment, Exhibit Marketshare of Advisor Headcount and Assets, Exhibit Advisor Headcount, Exhibit Advisor Headcount Marketshare, Exhibit Advisor-Managed Assets, Exhibit Advisor-Managed Asset Marketshare, Exhibit Advisor Productivity, Exhibit Advisor Productivity Index (PX), Exhibit Projected Advisor Headcount, E...49 Exhibit Projected Advisor Headcount Marketshare, E Exhibit Projected Asset Marketshare, E...51 Chapter 3: Product Sizing Exhibit Product Sizing by Channel, Exhibit Product Sizing by Channel Databank, Exhibit Product Sizing by Year, Exhibit Mutual Fund Sizing by Channel, Exhibit Mutual Fund Sizing Databank, Exhibit Individual Securities Asset Sizing by Channel, Exhibit Individual Securities Sizing Databank, Exhibit ETF Sizing by Channel, Exhibit ETF Sizing Databank, Exhibit Variable Annuity Sizing by Channel, Exhibit Variable Annuity Sizing Databank, Exhibit Separate Accounts Sizing by Channel, The Cerulli Report U.S. Intermediary Distribution 2018

6 Exhibit Separate Accounts Sizing Databank, Exhibit Advisor-Sold DC Sizing by Channel, Exhibit Advisor-Sold DC Sizing Databank, Chapter 4: Distribution Channels Exhibit Top-25 Broker/Dealer Networks by Advisor Headcount, Exhibit 4.02 Part 1. Top-25 B/D Networks by Assets Under Management, Exhibit 4.02 Part 2. Top-25 B/D Networks by Assets Under Management, Exhibit 4.03 Part 1. Channel Segments, Exhibit 4.03 Part 2. Channel Segments, Exhibit 4.04 Part 1. Top-25 Broker/Dealers by Assets Under Management, Exhibit 4.04 Part 2. Top-25 Broker/Dealers by Assets Under Management, Exhibit Wirehouses by Assets Under Management, Exhibit National and Regional B/Ds by Assets Under Management, Exhibit 4.07 Part 1. IBDs by Assets Under Management, Exhibit 4.07 Part 2. IBDs by Assets Under Management, Exhibit Retail Bank B/Ds by Assets Under Management, Exhibit Insurance B/Ds by Number of Advisors, Exhibit Retail-Focused RIA Firms, Assets, and Advisors, Exhibit Hybrid RIA Assets, The Cerulli Report U.S. Intermediary Distribution

7 Chapter 5: Advisor Portfolio Construction and Product Use Exhibit Advisor Portfolio Construction Process, Exhibit 5.02 Part 1. Advisor Portfolio Construction Process Databank, Exhibit 5.02 Part 2. Advisor Portfolio Construction Process Databank, Exhibit Advisor Portfolio Construction Strategy, Exhibit Advisor Portfolio Construction Strategy Databank, Exhibit Advisor-Reported Portfolio Discretion Breakdown, 2018 vs. 2020E...91 Exhibit 5.06 Part 1. Advisor-Reported Portfolio Discretion Breakdown Databank, 2018 vs. 2020E...92 Exhibit 5.06 Part 2. Advisor-Reported Portfolio Discretion Breakdown Databank, 2018 vs. 2020E...93 Exhibit Advisor-Reported Product Mix, 2018 vs. 2020E...94 Exhibit 5.08 Part 1. Advisor-Reported Product Mix Databank, 2018 vs. 2020E...95 Exhibit 5.08 Part 2. Advisor-Reported Product Mix Databank, 2018 vs. 2020E...96 Exhibit Percent of Advisors Using Investment Products, Exhibit Percent of Advisors Using Investment Products Databank, Exhibit Advisor Beliefs about Active and Passive Management, Exhibit 5.12 Part 1. Advisor Beliefs about Active and Passive Management Databank, Exhibit 5.12 Part 2. Advisor Beliefs about Active and Passive Management Databank, Exhibit Advisor Allocation to Passive Strategies, 2018 vs. 2020E Exhibit Advisor Allocation to Passive Strategies Databank, 2018 vs. 2020E Exhibit Advisor-Reported Allocation to ETFs by Product Type, 2018 vs. 2020E Exhibit Advisor Use of Passive Strategies, Exhibit Advisor Use of Passive Strategies Databank, Exhibit Advisor-Reported Allocation to Active and Passive Products, Exhibit Advisor-Reported Distribution of Mutual Fund Assets, 2018 vs. 2020E Exhibit Advisor-Reported Distribution of Alternative Assets, 2018 vs. 2020E Exhibit Expected Change to Alternative Strategies in Next 24 Months, Exhibit Number of Variable Annuity Contracts Sold in Past 12 Months, Exhibit Number of Variable Annuity Contracts Sold in Past 12 Months Databank, Exhibit Reasons for Not Recommending Variable Annuities, Exhibit Reasons for Not Recommending Variable Annuities Databank, Exhibit Factors Advisors Consider When Selecting a Variable Annuity Provider, The Cerulli Report U.S. Intermediary Distribution 2018

8 Exhibit Factors Advisors Consider When Investing in an Annuity, Exhibit Advisors Views on the Benefits of Emerging Annuity Designs, Exhibit Advisors Views on the Benefits of Emerging Annuity Designs Databank, Chapter 6: Distribution Strategy Exhibit Greatest Challenges to Achieving Distribution Goals, Exhibit Greatest Key Accounts Challenges, Exhibit Greatest Wholesaler Challenges, Exhibit Expected Change in Resource Allocation, Exhibit Current Channelization of B/D Salesforce, Exhibit Key Accounts Strategies, Exhibit Wholesaling Strategies, Exhibit Most Effective Wholesaler Training Methods, Exhibit Reasons Advisors Choose an Asset Manager, Exhibit Effectiveness of Methods to Position Active vs. Passive Investment Strategies, Chapter 7: Salesforce Staffing and Compensation Exhibit Salesforce Headcount, Exhibit Expected Salesforce Headcount Changes, 2020E Exhibit Expected Sales Headcount Change Databank, 2020E Exhibit Wholesaling Headcount, Exhibit Key Accounts Headcount, Exhibit Dedicated Data Analytics Staff, Exhibit Breakdown of Wholesaler Compensation, Exhibit Distribution of Wholesaler Compensation, Exhibit Breakdown of Key Accounts Manager Compensation, Exhibit Distribution of Key Accounts Manager Compensation, The Cerulli Report U.S. Intermediary Distribution

9 Chapter 8: Wholesaling Exhibit Average Territory Size, Exhibit Time Allocation, Exhibit Methods of Scheduling Meetings, Exhibit Average Number of Annual Contacts, Exhibit Average Number of Weekly Conversations with Wholesalers, Exhibit Experience and Tenure, Exhibit Feelings about Sales Goals, Exhibit Feelings about Performance Metrics, Exhibit Expected Monthly Activity, Exhibit Internal/External Wholesaler Partnerships, Exhibit Effectiveness of Methods to Engage with Advisors, Exhibit Advisor Profiling Metrics, Exhibit Sources of Advisor Prospects, Exhibit Most Valuable Offerings Provided by Wholesalers to Advisors, Exhibit Most Valuable Resources Provided by Asset Managers to Advisors, Exhibit Most Important Firm Communications Provided to Advisors, Chapter 9: Partner Firm Relationships Exhibit Top Focus Firms, Exhibit Factors Used to Prioritize Focus Firms, Exhibit Impact of Product Rationalization, Exhibit Number of Firms Covered, Exhibit Key Factors for Maximizing Distribution at Primary Focus Firms, Exhibit Importance of Relationship-Building Activities with Partner Firms, Exhibit Reasons for Reevaluating Focus Firms, Exhibit Location of B/D Professional Buyer Support, Exhibit Key Factors for Developing Relationships with B/D Professional Buyers, Exhibit Time Allocation, Exhibit Average Frequency of Formal Review Meetings, Exhibit Forms of Support for Wholesalers, The Cerulli Report U.S. Intermediary Distribution 2018

10 Exhibit Perceptions of Sales Goals, Exhibit Perceptions of Sales Metrics, Exhibit Revenue Sharing with Partner Firms, Exhibit Annual Strategic Marketing Costs, Exhibit Impact of Rising Partner Firm Relationship Costs, Glossary Index of Companies The Cerulli Report U.S. Intermediary Distribution

11 Index of Companies AIG...82 Allianz...57 American Century...31 Ameriprise...16, 21, 69, 79, 81 AssetMark... 71, 165 AXA...82 BlackRock... 31, 33, 119, 150, 159 Cambridge Investment Research... 22, 46 Capital Group...33 Capital One...71 Captrust...79 Chase Bank...81 Cetera...71 Commonwealth Financial Network... 22, 46, 79 Dynasty Wealth Partners...20, 40, 161, 164 Edward Jones... 15, 16, 22, 45, 69, 70, 75, 78 Envestnet Focus Financial... 20, 69, 83 Genstar Capital...71 HighTower...20, 40, 161, 164 Invest Financial Corp...70 Investment Centers of America...70 J.P. Morgan...33 Jackson National...70 John Hancock...18, 26, 27, 71 LightYear Capital LPL... 16, 69, 70, 79, 161, 163 Macquarie...18 Mercer... 19, 25, 71 Merrill Lynch...51, 69, 70, 77, 164 MetLife...82 Morgan Stanley...28, 51, 69, 70, 75, 77 Morningstar... 19, 25 National Planning Corp...70 Oppenheimer...34 Orion Advisor Services... 19, 86 Raymond James... 15, 78, 79, 161, 163 RBC... 22, 45, 78 Riskalyze... 19, 86 Royal Alliance The Cerulli Report XXXX 2017

12 Index of Companies SII Investments, Inc...70 SigFig...81 Steward Partners...79 Stifel... 22, 45 T. Rowe Price...18 UBS... 16, 69, 75 Waddell & Reed...79 Wells Fargo...51, 69, 70, 75, 81 Woodbury Financial...71 The Cerulli Report XXXX