Registered Investment Advisors (RIA) are a particularly challenging audience for asset manager wholesalers, proving less receptive to wholesalers than advisors in other channels, according to the latest findings of Ignites Distribution Research.
Ignites Distribution Research. surveyed RIAs and broker-dealer advisors to find out how many consider themselves “receptive” to wholesalers. While 30 per cent of the biggest advisors at broker-dealers said they were receptive to wholesalers, only 10 per cent of the elite RIAs and only 20 per cent of the mid-size RIAs consider themselves receptive to wholesalers.
Those findings and more, are contained in a newly released report from Ignites Distribution Research, Advanced Strategies for the RIA Channel, which takes a 360-degree view of the issue, looking at it from four perspectives: heads of dedicated RIA channel sales at asset managers; big, elite RIAs; midsize RIAs; and distribution and data analytics personnel at fund firms who work with CRM systems.
What’s more, elite RIAs will meet with their inner circle wholesalers an average of only 3.1 times per year (and midsize RIAs 2.4 times per year on average). That compares with nearly four times per year for top advisors at wirehouses and independent broker-dealers. RIAs are, on the whole, a tougher crowd for asset managers’ sales forces.
“The RIA channel is challenging to master even for managers long-established in this space,” says Rita Raagas De Ramos (pictured), US Research Manager at Ignites Research. “Because RIAs are truly different from broker-dealer channels, fund firms need to have a dedicated RIA sales team to succeed in this market. That’s the only way to ensure the manager is focusing on the unique needs of this channel.”
The vast majority of the asset managers selling to RIAs — 93 per cent of them — have a team that’s dedicated to the RIA channel. And half of the firms covering RIAs plan to boost their RIA sales staff in the next 12 months, which is another sign of how competitive the RIA market is becoming.
Financial advisors’ views are based on three surveys by Ignites Distribution Research: and the Financial Times 300 Top Registered Investment Advisors, a list of 300 elite, independent RIA firms with average assets under management (AUM) of USD2.8 billion per firm; 60 midsize RIAs, with AUM of USD100 million to USD500 million and an average AUM of USD207 million; and the Financial Times 400 Top Broker-Dealers Advisors, a list of 400 top broker-dealer advisors averaging USD1.7 billion in AUM per advisor.
