According to the global analytics firm, assets under management are increasing by 13% for RIAs and 19% for advisers dually registered as advisers and broker/dealers.

“With the asset management industry inching forward, adviser transitions, investor choice and organic growth have favored the RIA and dually registered channels,” said Tyler Cloherty, associate director at Cerulli. “As advisers move into the RIA and dually registered channels, many new entrants will be progressively smaller, but this is contributing to significant growth within the channels.”

Cerulli’s report, “The State of the U.S. Retail and Institutional Asset Management,” is based on interviews with more than 50 asset management firms. In addition to providing growth of assets by channel, Cerulli analyzes the dynamics in the retail and institutional channels, and the preferred investment vehicles in these markets.

“Advisers are migrating into the RIA channel either by starting their own practice, or joining existing firms,” Cloherty said. “While wirehouse asset market share may be on a decline, assets per adviser there remain the strongest in the industry. Advisers within wirehouses manage nearly double the assets of their competitors in the dually registered and RIA segment.”

Higher platform fees and more expensive revenue-sharing agreements, which asset managers are willing to pay, are raising the cost of doing business with wirehouses, Cloherty said. “At the same time, this is leading some managers to increase their focus on the RIA market due to the lower cost of doing business in the space. However, the sheer size of the wirehouse channel means it will remain a primary target for asset managers.”

Cerulli predicts assets will remain concentrated among wirehouse advisers. However, the number of advisers in this channel will continue to dwindle, which will force asset managers to reorganize their wholesaling teams to include coverage of the RIA channel.