Asset growth in the registered investment advisor channel is forecast to expand faster than the channel’s headcount growth, according to Cerulli Associates.
The global analytics firm expects RIAs and dually registered advisors combined will comprise 27.9 percent of total intermediated retail investor assets and 24.6 percent of advisor headcount by year-end 2018. As of year-end 2013 they made up 19.8 percent of total asset marketshare and 18.6 percent of advisor headcount.
"The asset marketshare of the RIA channel exceeds headcount marketshare, reinforcing the fact that RIA advisors manage more assets than advisors outside of the channel, on average," said Kenton Shirk, associate director at Cerulli.
As explained in The Cerulli Report: RIA Marketplace 2014: Growth Drivers in an Accelerating Industry Segment, the RIA channel has gotten a boost from the growing number of dually registered advisor practices which affiliate with an independent broker-dealer for brokerage platform access while maintaining their own RIA registration. This model was traditionally seen as a transition stage to a full-fledged RIA model, but Cerulli says many dually registered advisors are happy combining the best of both worlds without getting bogged down in the little details of running an independent shop.
“Cerulli believes this option creates best-case scenarios both for dually registered practice owners, who are able to increase their firms’ revenues, as well as prospective advisors, who are able to make more efficient transitions into established practices while still leaving themselves the option to establish their own standalone firms later if they so choose,” the report said.