Six percent of the growth in assets came from existing accounts, 5 percent came from new households, and three percent from new advisors.
Departing clients, however, took a toll, reducing overall growth by 5 percent, says the firm. The study also revealed that clients are getting older. The average client was 60 in 2011; last year the average age was 61.
PriceMetrix says the industry is continuing to shift to a fee-based business model. The percentage of fee-based assets increased to 31 percent in 2013, rising from 28 percent in 2012 and 26 percent in 2011. And almost half of advisors revenue was generated from fee-based business, the percentage increased from 45 percent in 2012 to 47 percent in 2013.
However, this increase in fee-based business was undercut by continuing downward pressure on pricing, according to the study. Average fee account RoA declined to 0.99 percent in 2013 from 1.06 in 2012 and 1.14 in 2011.
“Advisors and their firms have a lot to consider. A key challenge, however, remains how to create, articulate and deliver a value proposition that helps to attract and keep desirable wealth management clients,” said Trott. “Another challenge is how to create a sustainable book that is not overly reliant on aging clients.”