Retail Nears Institutional Market Share of Professionally Managed Assets
Both retail client channel and institutional channel assets reached all-time highs across US markets, according to Cerulli.
Professionally managed assets in the U.S. totaled $73.7 trillion, broken down to $37.1 trillion in institutional channel assets and $36.6 trillion in retail client channel assets, according to Cerulli Associates’ report, “The State of U.S. Retail and Institutional Asset Management 2025.”
In 2020 and 2021, retail client channel market share briefly surpassed institutional channel market share, but this trend reversed in 2022 due to significant equity market pullback. However, retail client channels continued gaining long-term ground and now have close to 50% market share, according to the research.
“A higher year-over-year growth rate in 2024 highlights a return to the long-term, 10-year growth rate trends that have favored retail client channels,” said Brendan Powers, co-head of Cerulli’s product development and institutional practices, in a statement. “We expect this to continue as corporate [defined benefit] plans pursue pension risk transfers and corporate [defined contribution] plans continue to witness assets roll over into [individual retirement accounts].”
Cerulli recommended asset managers continue to monitor emerging trends and intermediaries for both retail and institutional channels.
The report also found that at the end of 2024, U.S. outsourced CIO assets reached $3.3 trillion, having tripled in less than a decade. Further growth in OCIO assets is expected due to new client adoptions and replacement mandates.
Registered investment adviser channels are also becoming increasingly important to many asset managers’ retail distribution strategies. The independent and hybrid channels’ outsized asset growth was fueled by adviser movement and mergers and acquisitions, creating an attractive $5.9 trillion in professionally managed assets. According to Cerulli, M&A fueled by private equity and aggregators have led to a handful of firms controlling the bulk of RIA assets.
Additionally, asset managers are broadening the range of investment vehicles available to both retail and institutional investors.
“The [collective investment trust] vehicle is now table stakes for managers operating within the DC space,” Powers said in the statement. “For those pursuing distribution in retail client channels, the [exchange-traded fund] and [separately managed account] are increasingly utilized, while managers also seek to build out a variety of illiquid alternative wrapper options (e.g., private funds, interval funds) to make private market strategies easier for affluent investors to access.”