March 26, 2012
for asset managers is fierce in the registered investment adviser (RIA) channel.
Fewer than 1,500 of the more than 16,500 firms in the channel
manage 90% of the assets, resulting in a short list of frequently targeted
firms, according to research from Cerulli Associates.
Assets have consolidated in the RIA segment, causing the
asset management distribution process, adviser portfolios and product demands
"More than 80% of RIA firms fall below the $100 million
asset threshold used by many asset management distributors to justify sales
focus,” said Scott Smith, head of Cerulli’s intermediary practice. “Asset
managers searching for untapped markets will be unimpressed with the lack of
assets at the lower tier of the RIA market.”
Cerulli’s research also found that although assets grew
16.6% from year-end 2009 to year-end 2010, the number of firms in the RIA space
actually fell 1.1%. Rather than a sign of slowing growth in the channel, Cerulli
analysts think this represents a beneficial maturation in the channel as less
successful firms left the industry, and incoming advisers increasingly chose to
join existing practices instead of starting their own.
Cerulli predicts there will be a continued increase in this
as larger RIA practices target advisers in the wirehouse and regional channels
who want increased independence without the complications of starting a small
This research is from “Cerulli Special Quantitative Update:
Registered Investment Advisor Market” and is available for purchase by