On the other hand, dually registered advisors are expected to see inflows of $62 billion, independent broker-dealers and RIAs are projected to gain roughly $50 billion each, and banks stand to gain $45 billion.
That's not to say the wirehouses will wither and die anytime soon. On the contrary, says Cerulli, these firms still control about half of the nearly $4 trillion in advisory-controlled assets.
But changes within the wirehouses will help accelerate the asset migration away from that channel, says Cerulli analyst Scott Smith. Specifically, Merrill Lynch (now owned by Bank of America), Morgan Stanley Smith Barney and UBS are culling their ranks of lower producers and focusing efforts to keep existing top talent at their firms or to poach large producers from their competitors.
Among the independent broker-dealers, Smith says the likes of LPL, Ameriprise, Cambridge Investment Research and Commonwealth Equity Services have done a good job in attracting high-quality advisors. "These firms are well-positioned to compete on a platform level with the industry's largest firms because they've made the commitment to make products and services available that advisors are accustomed to," he says.
Nonetheless, Cerulli's Projected advisor headcount breakdown by channel for 2012 (compared to year-end 2008) shows only the dually registered and RIA channels making gains. The dually registered channel is expected to increase from 6% to 8%, while the RIA space is expected to grow from 4.8% to 11.6%.
Team-Based Advisory Practices Grow
The number of financial advisors working in team-based practices jumped about 60% during the past two years, according to a Cogent Research study of 1,529 advisors.
Increases were seen across all channels, but the biggest rise came among wirehouse advisors, where 31% of surveyed advisors participated in team-based practices in 2009 versus 18% in 2007. Overall, 24% of respondents said they were in team-based practices this year compared with 15% two years ago.
Cogent sees the trend continuing as the advisory industry ages and client needs become more complex. John Meunier, Cogent's principal and cofounder, said the trend often takes shape by teaming a younger advisor focused on asset gathering with an experienced advisor who continues to provide financial planning advice.
"They're using the younger partner as a transitional figure to bring new blood into the practice," Meunier says. "Both advisors and their clients are getting older, so they're refreshing the book with new advisors and clients. I think that's one of the main drivers within the wirehouse channel."
Wirehouse teams typically include two members focused on asset management, but teams at registered investment advisory firms often include four members delivering a range of services such as estate planning, tax planning and trust services.