Most of the $206 million in assets in Direct Choice so far have come from new money, she said, but Advisor Group has a support team that can help traditional check-and-app reps make the transition “en masse” to the brokerage firm, she said.
Early next year, LPL Financial plans to roll out its own no-fee, mutual-fund-only account, with an upfront access fee of 3.5 percent and participation from 20 fund companies with the ability to switch between them at no charge once the fee is paid or eligible shares are transferred in. LPL has said the $50 billion of client assets held directly with fund companies will be grandfathered, but new accounts will no longer be allowed to custody directly with fund sponsors.
Finally, the mushrooming of low-minimum managed accounts has given advisors more options to use with clients who may have gone direct in the past.
Case in point: While direct business has declined at 1st Global, the firm has seen more than a 100 percent increase in new accounts this year going into advisory programs, Knoch said.
Ongoing monitoring through an advisory account is where the industry is headed, observers say, even with smaller accounts.
As for the old-fashioned check-and-app business?
“I don’t see direct-to-mutual fund business staying around,” Pershing’s Bell said last month. “It’s just really difficult for B-Ds to supervise and handle. And it’s never been terribly efficient for the asset managers or the advisor.”