Wirehouses Could Cede 7% Market Share


Increasing distribution costs and adviser movement in the asset management industry are causing asset managers to look more closely for growth opportunities.


Cerulli’s latest research study focuses on intermediary distribution and how to optimize channel strategies, product focus and sales team effectiveness. For firms focusing on wirehouses, it includes a prognosis that these firms will cede market share by as much as 7% in the next three years.

“A key part of this annual report is the intermediary market sizing. It’s even more comprehensive this year as we were able to increase our base of adviser survey respondents from 1,500 to more than 6,000 across channels,” explains Bing Waldert, director at Cerulli Associates.

According to Waldert, the survey findings indicate a shifting adviser base between channels, with a lot of activity moving away from the wirehouse firms.

Cerulli attributes some of the cause for the shift between channels to merger activity among the large wirehouse firms, which has naturally fueled restructuring efforts.

“Any time a merger takes place, a number of integrations arise, whether it’s physically combining offices, or integrating operating platforms and synching technology,” said Tyler Cloherty, senior analyst at Cerulli.

As a result of the projected reductions in market share at wirehouses, sales resources allocated to the channel have also been reduced. The strong growth in the registered investment adviser (RIA) channel has caused a shift in focus from wirehouses to RIAs.

“Asset managers have started looking at the big distribution picture,” said Cloherty. “Many have begun adjusting their focus on distribution and are reallocating resources accordingly.”