Deals & People June 7, 2010

Pickett Helps CAPTRUST Expand into Dallas

John A. Pickett has joined Raleigh, North Carolina-based CAPTRUST Financial Advisors, leaving RBC Wealth Management’s Institutional Consulting Group.
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The company said Pickett, Senior Vice President, will be part of a new CAPTRUST Dallas office.

While at RBC, Pickett built an advisory practice with $8.5 billion in assets under management, with many of his client relationships spanning 25 years or more.

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Joining Pickett in the new Dallas office are two of his associates, Jack Pratt, financial adviser, and Roberta Kayatta, client coordinator associate.

In addition to the team in Dallas, in 2010, CAPTRUST said it has also hired Dan DiGiacomo in Orlando, Florida; Christopher Kulick in Philadelphia, Pennsylvania; and Greg Diagonale in Raleigh, North Carolina.

In 2009, the firm added ten advisers and opened offices in Ohio and California (see “Davis to Anchor CAPTRUST West Coast Expansion,” “Wilt & Team Set a New Course,” “CAPTRUST Adds Another Adviser,” “Jones Blair Group Reconnects with CAPTRUST”).

CAPTRUST Financial Advisors is an independent investment research and advisory firm specializing in providing retirement plan and investment advisory services to retirement plan fiduciaries, executives, and high net-worth individuals. The company represents $33 billion in client assets with offices in Alabama, California, Florida, Georgia, North Carolina, Maine, Massachusetts, Mississippi, Ohio, Pennsylvania, Texas, Virginia, and Washington, D.C.  For more information, visit www.captrustadvisors.com.

The Markets June 7, 2010

FRC: Advisers Still Drive Fund Sales

Despite a reduction in the advisory force, retail advisers still represented nearly 60% of total mutual fund gross sales for 2009, according to the Financial Research Corporation (FRC).
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FRC’s Mutual Fund Market Sizing study also found  that the advisory landscape has shifted dramatically over the past year. The number of retail advisers declined 17% between 2009 and 2010. Specifically, advisers in the independent channel declined due to consolidation and closures of independent broker/dealers, while adviser headcount in the insurance channel fell due to insurance firms spinning off non-core brokerage arms, FRC said.

Nonetheless, FRC said the data represents the advisory channel’s stability as a core mutual fund distribution channel.

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FRC also expects to see growth in the registered investment adviser (RIA) channel, which is the largest generator of mutual fund gross sales among intermediary channels. FRC projects the RIA channel to more than double its mutual fund assets by 2014.

Fund Sales to Subside

While mutual fund net sales posted a record-high year in 2009, FRC says they will moderate in 2010, despite strong flows year-to-date through April ($187 billion).

FRC indicated that investors appear to have stopped chasing equity market performance and are shortening their average mutual fund holding periods. FRC projects flows into mutual funds will begin to normalize in 2011 and trend upward through 2014. 

FRC noticed that although equities rebounded strongly during 2009, investors didn’t respond like they have during historical equity market upticks and were simply unwilling to take on more risk at the time. “Investors are still too risk averse to invest new money into products that are traditionally associated with higher risk levels,” said Bridget Bearden, the study’s author, in the release. “Generally speaking, what we are seeing is a lull in investor performance-chasing behavior. This is demonstrated by investors’ reluctance to jump into equities even in the face of a dramatically improving equities market. We believe this signifies a continued paralysis of flows into the equities market through the end of this year.” 

FRC also analyzed average long-term mutual fund holding periods, identifying that they reached their high in 2005 and 2006 at an average holding period of 4.4 years, and subsequently declining to 3.8 years at year-end 2007, followed by a 2.9-year holding period at year-end 2008. 

The Mutual Fund Market Sizing study is based on an analysis of FRC’s proprietary database of mutual fund assets and net sales, FRC IMPACT, and FRC’s Advisor Insight Series, as well as data from various industry sources, including the Investment Company Institute (ICI).

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