Cerulli projects contraction in number of advisorsNews added by National Underwriter on September 17, 2013
National Underwriter

National Underwriter

Joined: April 22, 2011

By Warren S. Hersch

The force of the financial advisory field will decline by 8 percent by year-end 2017, according to a new report.

Cerulli Associates discloses this finding in “Intermediary Distribution 2013: Product Distribution in a Shrinking Industry.” The study focuses on financial products and distribution, including market-sizing, advisor product use and asset manager sales forces.

The report shows the number of advisors declining over the five-year period to 280,000 from 305,000, down 25,000.

“The insurance channel accounts for the largest portion of the advisor population,” says Cerulli Analyst Sean Daly in a press statement. “The registered investment advisor and dually registered channels were the only sources of headcount growth in 2012, but together they amount to only 15 percent of the industry’s advisors. The independent broker-dealer channel experienced the largest market share change over the last few years.”

The report shows assets managed by dually registered advisors growing by a 13.7 percent compounded annual growth rate (CAGR) to $1.8 trillion in 2016 from $1.1 trillion at year-end 2012. Bank broker-dealers will enjoy a 9.9 percent CAGR spurt, with assets increasing to $916.5 billion from $629.3 billion. And registered investment advisors’ assets are expected to grow to $2.2 trillion in 2016 from $1.6 trillion in 2012, an 8 percent CAGR.

The one channel that will suffer an asset decline in the Cerulli projection is that of independent broker-dealers, with managed assets falling to $1.7 trillion from $1.8 trillion, a 0.8 percent dip.

The following chart shows assets projected by channel (years 2013 through 2016 are estimates, in $ billions).

Channel20122013E2014E2015E2016E4-Year CAGR
Wirehouse$5,360.1$5,454.1$5,551.1$5,651.1$5,754.21.5%
Regional B-D$1,867.0$2,007.0$2,156.8$2,317.1$2,488.87.5%
RIA$1,578.3$1,709.1$1,847.7$1,994.8$2,150.88.0%
Dually registered$1,091.3$1,247.3$1,420.0$1,611.1$1,822.613.7%
IBD$1,801.7$1,787.8$1,773.9$1,759.8$1,745.80.8%
Bank B/D$629.3$693.0$761.9$836.2$916.59.9%
Insurance B-D$434.5$437.8$441.1$444.5$447.90.8%
Total:$12,762.3$13,336.1$13,952.4$14,614.7$15,326.64.7%

Originally published on LifeHealthPro.com
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