RIAs to control 28% of assets by 2018: Cerulli

Registered investment advisers are not likely to see a slowdown in growth as they continue to climb the ladder in assets under management. Thanks in large part to growth of dually registered advisers, who are also affiliated with a broker-dealer, the RIA channel is likely to control some 28% of the market by 2018, according to research firm Cerulli Associates. The RIA channel, which comprises approximately 15,800 firms managing $2.4 trillion in assets, currently manages some 19.8% of retail investor assets and represents 18.6% of adviser headcount, according to Cerulli. The research firm expects that to grow to 27.9% of assets and 24.6% of headcount in the next three years. Approximately 12.4% of those assets will be held by dually registered advisers, up from around 8.8% currently, according to Cerulli estimates. The convergence of the investment advisory and broker-dealer industry is due to more advisers migrating to RIAs from traditional distribution channels, according to the report. Dually registered firms are setting up “landing opportunities” for advisers who want to go independent without having to deal with running their own practice, according to the report. As a result, growth of dually registered advisers is outpacing any other channel, according to Cerulli. “It's a continuation of a trend,” said Tony Sirianni, managing partner at Sirianni Strategy Group. “You have breakaway advisers leaving wirehouses, and the industry is conforming to accommodate them.” Net growth in assets for other channels have paled in comparison to dually registered advisers that are gaining significant traction. “On average, the asset market share of the RIA channel exceeds headcount, reinforcing the fact that RIA advisers manage more assets than advisers outside of the channel," Kenton Shirk, an associate director at Cerulli, stated in a press release.