Are you a wirehouse advisor with at least $93 million in assets under management? Then you are the kind of advisor asset management distributors most want to reach.
Despite reduced market share in recent years, wirehouses still account for the most assets in the wealth management industry, a new report from Boston-based research firm Cerulli Associates said. As a result, the wirehouse firms, which include Merrill Lynch, Morgan Stanley, UBS and Wells Fargo, still hold the most opportunity for asset managers looking to close a sale.
The new report includes an Opportunity Index created by Cerulli that ranks the various wealth management businesses by the advantages they offer for asset managers. On a scale of 150 to 50, with 150 being the highest score, the wirehouse channel came in highest at 129. That was followed by regional, independent broker-dealer and registered investment advisor firms, who were neck and neck with scores of 107, 106 and 105, respectively. The channels that scored the lowest include the bank and insurance channels, with 75 and 73 points apiece. The index was compiled by considering addressable assets, projected growth and profitability, according to Cerulli.
The wirehouse market is particularly attractive because its advisors manage an average of $93 million, which is higher than the other wealth management channels. Those wirehouse advisors are also typically located in branches, which can allow asset managers sales staffs to reach more advisors in less time.
The wirehouse advisors are also more receptive to overtures from field wholesalers compared to registered investment advisors, Cerulli said. While the regional and RIA channels stand to benefit the most from advisors and clients alike defecting from wirehouse firms, RIAs are least likely to accept meetings with wholesalers or be swayed by portfolio and product pitches.
Advisors at independent broker-dealers and insurance firms came in as the least desirable for asset management professionals to spend their time. That is because closing deals with those advisors is more difficult and are smaller in value in comparison to the other wealth management channels.
Advisors who are most worth asset managers time all share three characteristics, according to Cerulli: they must have enough assets, be willing to collaborate on products and portfolio construction and want to interact with wholesalers.
The key message for both wholesalers and advisors is be willing to listen, said Cerulli Analyst Sean Daly.
A big thing for sales organizations to realize is to make sure youre getting someone whos listening to what you have to say, Daly said of the asset managers.
That also goes for advisors who are looking to build their books of business. By taking a meeting with a wholesaler and hearing a product pitch, advisors may also learn new ideas on capital markets research or ways to handle fees.
Be willing to take in the information thats given to you, Daly said.