Indies growing, but wirehouses have assets

The number of brokers at independent dealers will catch up to the wirehouses in about three years, said Charles "Chip" Roame, managing principal of Tiburon (Calif.) Strategic Advisors LLC. But the independents are, and will remain, far behind in assets, he said. “The wirehouses still bring in more dollars” every year, he said. “They're still doing quite fine.” The bulk of financial assets “still sit in two places — the wirehouses and the banks,” he said. Mr. Roame made his comments yesterday in opening remarks at his annual conference for financial services executives in San Francisco. Overall, advisers control 45% of investable assets, Mr. Roame said. That segment is growing faster than assets invested at do-it-yourself providers, and money in retirement plans, foundations and endowments. “Money is heading to advisers right now,” he said. But independent broker-dealers and investment advisers are growing fastest, according to Tiburon research. Mr. Roame also chided the financial press for focusing on growth rates in comparing asset levels and products, while ignoring the larger context. “ETFs and [separately managed accounts] are not taking over the world” as has been reported, he said. Out of $35 trillion in financial assets, mutual funds have $10 trillion, life insurance products account for $3 trillion, hedge funds another $2 trillion, and ETFs have a relative paltry $460 million in assets. “ETFs will never catch up” with mutual funds, he said, unless they sustain 700% growth rates for several decades. ETF assets grew about 40% last year.