U.S. RIA MARKETPLACE 2017

Transcription

1 U.S. RIA MARKETPLACE 2017 Ascendance of the Billion-Dollar Firm Overview & Methodology This report, in its seventh iteration, provides an in-depth analysis of the retail-focused registered investment advisor (RIA) marketplace. The report includes Cerulli s 10+ year market sizing of the independent RIA and hybrid RIA channels, addressing factors that have led to the channels high growth. It offers insights about the needs, challenges, and opportunities facing RIAs in today s environment. The report also covers key topics for RIA sales distribution, including product use, portfolio construction approaches, and allocation changes. Data included in this report comes from Cerulli s long-running annual advisor survey and includes insights from distribution teams at asset management firms. Research interviews were conducted with industry executives, RIAs, RIA custodians, and RIA service providers whereby participants engage in open dialogue about the current state and outlook for the advisor markets. Benefits: y Understand the pain points and growth strategies of billion-dollar RIAs y Identify the major drivers of expansion for RIA platforms and aggregators y Uncover growth trends across firm AUM segments y Examine evolving coverage models and distribution tactics for the RIA channel Questions Answered: y How are billion-dollar RIAs amassing asset and headcount marketshare? y What challenges are billion-dollar RIAs facing? y What factors are driving growth for RIA consolidators? y What is driving rapid change in the RIA channel? y Will hybrid RIAs retain their B/D affiliation? y How can wholesalers have more meaningful interactions with RIAs? SUBSCRIPTION DETAILS $19,000 PURCHASE INCLUDES y Digital copy and hardcopy in color y Online access to 7 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 4 years of The Cerulli Report U.S. RIA Marketplace y Boutique Advisor Firms and RIAs: Balancing Scale and Independence for Top-Tier Advisors y State of the RIA Marketplace 2012: Sizing, Product Trends, and Distribution Opportunities y Registered Investment Advisor Market 2011 For more information, contact us: ``info@cerulli.com ANNUAL 213 PAGES 164 EXHIBITS Cerulli Interactive Report Dashboards NEW 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. Product Use Overview: Review product use and adoption trends by channel, focusing on mutual funds, ETFs, variable annuities, separate accounts, and individual securities. 2. Growth Trends: Compare RIAs growth rate to billion-dollar RIAs growth rate by AUM. 3. Analyst Teams: Explore firms that have an investment analyst or CIO by AUM; RIA analysts and RIAs portfolio construction philosophy; asset manager selection by RIAs, RIA wholesalers, and RIA analysts; RIA interactions with wholesalers; and opinions on active vs. passive. 4. Market Landscape: Examine historical marketshare for independent and hybrid RIAs by AUM size across asset, advisor headcount, and firm metrics. 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 Billion-Dollar RIAs: Thriving at the Top Chapter 1 Exhibit 1.02 Firm Marketshare, Source: Cerulli Associates 8% 7% 6% 6.6% 7.1% 5% 4.6% 4% 3.8% 3.8% 3% 2% 2.2% 2.8% 3.0% 3.0% 1% 0% Independent RIAs $1b+ Hybrid RIAs $1b+ All RIAs $1b+ 27

4 Table of Contents: Expanded Key Questions Answered How are billion-dollar RIAs amassing asset and headcount marketshare? What challenges are billion-dollar RIAs facing? What factors are driving growth for RIA consolidators? What is driving rapid change in the RIA channel? Will hybrid RIAs retain their B/D affiliation? How can wholesalers have more meaningful interactions with RIAs?...22 Chapter 1: Billion-Dollar RIAs: Thriving at the Top Billion-Dollar RIAs...24 Part 1 View from the Top: Profile...25 Exhibit Billion-Dollar RIAs: Overview, Exhibit Firm Marketshare, Exhibit Core Market, Exhibit Staffing Levels, Exhibit Advanced Planning Services Offered, Exhibit Intergenerational Planning, Exhibit Challenges of Infrastructure Costs, Exhibit Challenges of Operating an RIA, Part 2 Beyond a Billion: Growth Trends...34 Exhibit RIA Asset Growth Rates, Exhibit Billion-Dollar RIA Asset Growth Rates, Exhibit Part 1. Asset Marketshare, Exhibit Part 2. Asset Marketshare, Exhibit Headcount Marketshare, Exhibit Desired Transition Approach for Breakaway Advisors, Exhibit Billion-Dollar RIAs by Five-Year CAGR, Exhibit Billion-Dollar RIAs by Five-Year CAGR Databank, Exhibit Billion-Dollar RIAs by One-Year Growth Rate, Exhibit Billion-Dollar RIAs by One-Year Growth Databank,

5 Part 3 Distribution Implications...44 Exhibit Product Mix, Exhibit Investment Research, Exhibit Dedicated Coverage for Largest RIAs, Exhibit National Sales Managers: Resource Allocation by Channel, 2017 vs. 2020E...47 Part 4 Competitor Implications...48 Exhibit National and Regional B/Ds Rankings by AUM, Exhibit IBD Rankings by AUM, Chapter 2: Market Sizing Channel Sizing Exhibit Description of Advisor Channels, Exhibit Firms, Assets, and Advisors, Exhibit Market Segmentation by Practice Type, Exhibit Advisor Headcount Marketshare, Exhibit Asset Marketshare, Exhibit Hybrid RIA Asset Breakdown, Exhibit Assets in Transition, Exhibit Assets in Transition Databank: Independent RIAs, Exhibit Assets in Transition Databank: Hybrid RIAs, Advisor-Sold Product Sizing Exhibit Assets by Product, Exhibit Assets by Product Databank, Channel Projections Exhibit Projected Advisor Headcount Marketshare, E Exhibit Projected Asset Marketshare, E...65 AUM Segments Exhibit Firms by AUM Segment, Exhibit Firms by AUM Segment Databank, Exhibit Part 1. Firm Marketshare by AUM Segment Databank, Exhibit Part 2. Firm Marketshare by AUM Segment Databank, Exhibit RIA-Managed Assets by AUM Segment, Exhibit RIA-Managed Assets by AUM Segment Databank, Exhibit Part 1. Asset Marketshare by AUM Segment Databank,

6 Exhibit Part 2. Asset Marketshare by AUM Segment Databank, Exhibit Headcount by AUM Segment, Exhibit Headcount by AUM Segment Databank, Exhibit Part 1. Headcount Marketshare by AUM Segment Databank, Exhibit Part 2. Headcount Marketshare by AUM Segment Databank, Exhibit Advisor Productivity by AUM Segment, Exhibit Advisor Productivity by AUM Segment Databank, Firm Rankings Exhibit Part 1. RIA Rankings by Firm AUM, Exhibit Part 2. RIA Rankings by Firm AUM, Exhibit RIA Rankings by Firm AUM Databank: Retail Independent, Exhibit RIA Rankings by Firm AUM Databank: Retail Hybrid, Exhibit RIA Rankings by Firm AUM Databank: Mixed Independent, Exhibit RIA Rankings by Firm AUM Databank: Mixed Hybrid, Chapter 3: Advisor and Practice Profiles Advisor Profile Exhibit Advisor Age, Exhibit Advisor Age Databank, Exhibit Advisor Experience, Exhibit Time Allocation, Team Structure and Staffing Exhibit Staffing Levels, Exhibit Team Structure, Exhibit Specialized Staff, Services Exhibit Practice Type Segments, Exhibit Practice Type Segments Databank, Exhibit Services Offered, Exhibit Services Offered Databank, Exhibit Services Offered Databank, Exhibit Financial Planning Clients, 2017 vs. 2019E Exhibit Financial Planning Clients Databank, 2017 vs. 2019E

7 Fees Exhibit AUM-Based Advisory Fees by Client Size, Exhibit AUM-Based Advisory Fees by Client Size Databank, Exhibit Financial Planning Fees, Exhibit Nontraditional Fee Use, Challenges Exhibit Nontraditional Fee Use Databank, Exhibit Challenges Operating an RIA, Exhibit Challenges Operating an RIA Databank, Chapter 4: Growth Drivers Exhibit RIA Asset Growth Rates, Exhibit IBD Advisor Reasons for Preferring RIA Model, Exhibit IBD Advisor Concerns About Opening an RIA, Exhibit IBD Advisors Considering RIA Channel, Exhibit Factors Attracting Breakaway Advisors, Exhibit Desired Transition Approach for Breakaway Advisors, Exhibit Sources of New Clients, Exhibit Sources of New Clients Databank, Exhibit Sources of New Client Flows, Exhibit Mergers and Acquisitions, Chapter 5: Client Relationships Exhibit Core Market, Exhibit Core Market Databank, Exhibit Client Investable Assets, Exhibit Average Client Size, Exhibit High-Net-Worth Clientele, Exhibit Client Age, Exhibit Number of Clients, Exhibit Client Coverage Ratios, Exhibit Part 1. Client Coverage Ratios Databank, Exhibit Part 2. Client Coverage Ratios Databank, Exhibit Frequency of Client Touchpoints,

8 Exhibit Part 1. Frequency of Client Touchpoints Databank, Exhibit Part 2. Frequency of Client Touchpoints Databank, Exhibit Value Proposition: Reasons Investors Choose an RIA, Exhibit Reasons for Client Withdrawals, Chapter 6: Portfolio Construction and Product Use Portfolio Construction and Allocations Exhibit Portfolio Construction Strategy by Firm AUM, Exhibit Portfolio Construction Process, Exhibit Asset Allocation for Moderate Risk Investors, Exhibit Product Mix, 2017 vs. 2019E Exhibit Product Mix Databank, 2017 vs. 2019E Exhibit Investment Product Use, Exhibit Retirement Income Methods by Firm AUM, Active vs. Passive Exhibit Allocation to Active and Passive Products, Exhibit Beliefs about Active and Passive Management, Exhibit Allocation to Passive Strategies, 2017 vs. 2019E Exhibit Use of Passive Strategies in Portfolio Construction, ETFs Exhibit RIA Use of Passive ETFs in Portfolio Construction vs. How Issuers Position ETFs with Advisors, Exhibit ETF Use by Asset Classes/Strategy, Exhibit Factors Considered When Evaluating an ETF, Alternative Investments Exhibit Expected Change to Liquid Alternative Strategies, Chapter 7: Asset Management Distribution Strategy Exhibit Expected Changes in Salesforce Resource Allocation by Channel, 2017 vs. 2020E Exhibit Salesforce Structure to Serve RIAs, Exhibit Hybrid RIA Coverage Strategy, Exhibit Transitioning Wholesaler Relationships for Newly Formed RIAs, Exhibit Heads of Key Accounts: Dedicated Coverage for Largest RIAs, Exhibit Firm-Level RIA Data,

9 Exhibit Wholesaler Interactions, Exhibit Challenges Faced When Distributing to RIAs, Exhibit RIA Wholesalers vs. RIAs: Asset Manager Selection, Exhibit RIA Wholesalers vs. RIAs: Wholesaler Offerings, Exhibit Asset Managers: Demand from RIAs for Products and Strategies, Exhibit Asset Managers High-Net-Worth Flows by Center of Influence, Chapter 8: Analyst Teams Exhibit Firms with Investment Analysts or CIOs, Exhibit Profile of Investment Analyst Teams, Exhibit Investment Team Staffing, Exhibit Primary Responsibilities, Exhibit Investment Decision-Making Process, Exhibit Investment Committees, Exhibit Portfolio Construction Philosophy, Exhibit Model Portfolio Influencers, Exhibit Asset Manager Selection, Exhibit Initial Screening Factors, Exhibit Preferred Content Providers, Exhibit Wholesaler Interactions, Chapter 9: RIA Custodians and Hybrid Platforms RIA Custodians Exhibit Top RIA Custodians by Assets Under Custody, Exhibit Top RIA Custodians by Number of RIA Clients, Exhibit Top RIA Custodians by Average Client Size, Exhibit Use of RIA Custodians, Exhibit Use of RIA Custodians Databank, Exhibit Notable B/Ds That Offer RIA Affiliation, Hybrid RIAs Exhibit Hybrid RIA Retention of B/D Affiliation, Exhibit Hybrid RIA Asset Custody Location, Exhibit Reasons Hybrid RIAs Plan to Retain B/D Affiliation,

10 Exhibit Importance of B/D Services to Hybrid RIAs, Exhibit Reasons Hybrid RIAs Plan to End Their B/D Affiliation, Exhibit B/D Affiliation Preference for IBD Advisors Considering RIA, Chapter 10: RIA Consolidators Exhibit Segment Overview, Exhibit Firm Summaries, Exhibit Firm Sizing, Exhibit Advisory AUM, Exhibit Advisory AUM by Year, Exhibit Total AUM Including Estimated Brokerage, Exhibit Advisory AUM Growth Rates, Exhibit Appeal of RIA Affiliation Models, Exhibit Appeal of RIA Affiliation Models Databank, Exhibit Affiliate Firms with Research Teams, Glossary Index of Companies

11 Index of Companies Index of Companies Advisor Group... 20, 205 AMG Wealth Partners... 36, 197, 201, 203 Artivest...21, 62, 139, 142, 167, 184, 193 Beacon Pointe Advisors , 197 Buckingham Asset Management...33 Cetera Charles Schwab... 16, 55, 58, 183, , 192, 196 Cleary Gull Advisors...33 Commonwealth Financial... 20, 55, 58 Dynasty Financial...16, 19, 197, , 205 Fidelity Investments... 16, 55, 58, 183, , 192, 196 Focus Financial Partners... 19, 31, 38, 48, 57, 197, 201 HighTower...19, 20, 23, 38, 48, 57, 197, 201, 202, 204, 205 icapital...21, 62, 139, 142, 167, 184, 193 Johnson Financial Group...33 Lightyear Capital/Wealth Enhancement Group... 20, 205 LPL Financial...20, 55, 58, 192 Mariner Wealth Advisors , 197 Merrill Lynch...54 Morgan Stanley...54 Pathstone Federal Street...39 Pershing... 16, 55, 58, , 192, 196 Raymond James...15, 20, 55, 58, 192 RBC...33 SCS Financial...38 TD Ameritrade... 16, 55, 58, 183, , 192, 196 UBS...54 United Capital...48, 111, 197 Wells Fargo