Professionally managed assets in the U.S. topped the $46 trillion mark in 2017, increasing 14.9 percent from a year earlier with retail clients and RIAs fueling the growth, according to a report by Cerulli Associates.
The retail independent registered investment advisor channel saw the highest growth in 2017, finishing at $3 trillion, up 20.4 percent.
The report concluded that wirehouses remain the largest retail channel, with $7.2 trillion in assets at the end of 2017, followed by the $6.9 trillion in the retail direct investor platform.
"Retail assets have largely outpaced institutional client assets in terms of growth over the last decade," Cerulli said in a press release.
Among the reasons for the retail asset growth is a migration of assets from institutional to retail channels that can be attributed, in part, to the growing number of individual retirement account rollovers, the report said.
Another factor is that institutional asset owners hold a high percentage of fixed-income assets, which have been outshined by equities due to a long period of low interest rates.
The trend means that asset managers cannot afford to ignore the development and distribution of retail products, according to Cerulli.
“As asset managers look to the future of product development and strategy, they should carefully evaluate several key factors,” suggests Brendan Powers, senior analyst at Cerulli, said in a prepared statement. “These include increased demand for low-cost index options, fee pressure, and commoditization."
The report also found that the number of U.S. financial advisors grew only 0.7 percent last year to 311,305, with the largest increase among independent RIAs (4.8 percent), followed by retail bank broker-dealers (2.7 percent) and regional and national broker-dealers (2.1 percent).
Wirehouse advisors represent just 15 percent of all advisors but control 35.4 percent of advisor assets, the report said.