RIAs poised to capture retiring boomers' assets

Registered investment advisers seem to be winning the race to capture the retiring-baby-boomer market, according to Charles "Chip" Roame, managing principal of Tiburon (Calif.) Strategic Advisors LLC, who spoke at the TD Ameritrade Partnership 2008 Conference in Orlando, Fla. this month. Client assets managed by fee-only financial advisers have grown 18% annually between 1995 and 2007, according to data compiled by Tiburon. Meanwhile, independent reps, and discount brokers and mutual fund companies, posted annual growth rates of 14% and 11%, respectively. "The data speaks for itself," Mr. Roame said. "RIAs are winning because they are staying the course." It seems that product purveyors have a vested interest in what RIAs are doing, Mr. Roame said, and are trying to push products on RIAs that they cannot use, such as hedge funds. While the statistics come as no surprise to many in the industry, some RIAs are leery when it comes to saying that they are "winning." "Those statistics don't surprise me at all," said Daniel Moisand, a principal of Spraker Fitzgerald Tamayo & Moisand LLC of Maitland and Melbourne, Fla. "The number of people who are seeking advice keeps going up, and a good number of those want a good adviser." However, Mr. Moisand feels that using the term "winning" goes a little too far. "It doesn't feel like I am winning when a client signs up," he said. "It is not strictly the RIA versus someone else." Saying that RIAs are winning means that they shouldn't be concerned about the threat of independent broker-dealers' getting into financial planning, said Len Skiena, vice president of S.R. Schill & Associates. "We can take some temporary comfort that for the time being, they are not taking significant business from the RIAs, and the RIAs seem to be holding their own," he said. Mercer Island, Wash.-based S.R. Schill has $70 million in assets under management. As assets in the RIA space have grown, fee-based assets have increased more than twelvefold. As of 2006, fee-based accounts totaled $1.5 trillion in assets, from $120 billion in 1995, according to data compiled by Tiburon. "What is happening is that others are replicating the manner of the RIAs — especially brokers," Mr. Roame said. He noted that H&R Block Financial Advisors Inc., the Detroit-based financial advisory unit of the Kansas City, Mo.-based tax preparer, recently signed a deal to use Chicago-based Envestnet Asset Management Inc.'s managed-accounts platform, which will allow its nearly 1,000 reps access to a single platform for investment products (InvestmentNews, Jan. 28). Aaron Siegel can be reached at [email protected].