Fueled by the growth of dually registered advisors, the assets under management by registered investment advisors are likely to amount to 28 percent of the market by 2018, according to projections from Cerulli Associates.
By the end of last year, the Boston-based reserach firm said, RIA and dually registered advisor assets made up 20 percent of total intermediated retail investor assets.
There are nearly 16,000 firms in the RIA channel managing $2.4 trillion in assets. These firms manage about 19.8 percent of retail investor assets and represent 18.6 percent of advisers in the business.
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The projected growth in AUM figures over the next few years underscores that the RIA channel's asset market share will continue to "exceed headcount market share," the firm said.
"When you combine this data (on RIA advisors' higher market share) with our projected growth of the channel, it would seem that the RIA channel would be a high priority for asset managers," said Kenton Shirk, associate director at Cerulli.
For a lot of managers, it already is.
Still, providers, Cerulli said, will need to be on their toes to be sure that they reach such "a dispersed market both efficiently and sustainably," to take full advantage of the opportunity for distribution growth it presents.
"Ongoing growth of RIA practices with more than $1 billion in assets has occurred, and while these practices are certainly attractive on a standalone basis, they become less so when compared to wirehouse branch offices, which represent equal or larger opportunities," Shirk said.
In other words, that trend in which advisors jump to dually registered firm isn't about to abate.
"The reality," Cerulli said, "is that strategic partnerships with large broker-dealers ensure branch office access and consideration for inclusion in the portfolios recommended by home-office teams, which can result in millions of dollars of flows based on a single decision."
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