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Asset marketshare of independent channels to surpass wirehouses by 2019, says Cerulli


The combined asset marketshare of independent advisory channels will surpass the wirehouse marketshare in the next five years, according to Cerulli Associates.

"Multiple factors have contributed to the historical and expected growth of independent channels," says Kenton Shirk, associate director at Cerulli. "More than two-thirds of advisors indicate they would prefer the independent broker/dealer, registered investment advisor, or dually registered models if they decided to leave their current firms.
"A key factor is the flexibility and autonomy inherent in the independent channel with regard to portfolio construction, operational flexibility, fee structure, and technology. The economics can also be appealing to advisors, as payouts are higher and advisors become responsible for their own overhead decisions. Independent advisors can build long-term enterprise value in not only their own solo practice, but also in a broader business entity comprised of multiple advisors, staff, and infrastructure."
Cerulli's Advisor Metrics 2014: Capitalizing on Transitions and Consolidation report focuses on advisor trends and consumer information, including market sizing, advisor product use and preferences, and advice delivery.
"Many independent broker/dealers and custodians have sufficient scale to offer broad and deep service offerings. Now many of the services offered have become commonplace across platforms, such as practice management resources, financial planning support, and investment research," says Shirk. "Technology advances have also minimised the differences in platform capabilities across channels."
Projected marketshare gains in the RIA and dually registered channels will likely come at the expense of wirehouses and independent broker/dealers, as Cerulli expects both channels to lose significant asset marketshare over the next five years.

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