Wirehouses are set to lose 7% market share in the next three years, according to a report released Monday by Cerulli Associates.

"These survey findings indicate a shifting advisor base between channels, with a lot of activity moving away from the wirehouse firms," Bing Waldert, director at Cerulli, said in a press release.

The drift of advisors away from wirehouses and into the RIA channel has been in place for several years. Cerulli chalks up part of the shift to mergers among the biggest wirehouse firms, which created a lot of restructuring. "Any time a merger takes place, a number of integrations arise, whether it's physically combining offices, or integrating operating platforms and synching technology," said Tyler Cloherty, a senior analyst at Cerulli.

The report said that advisor migration, plus investor mistrust in the wake of financial scandals have whittled down the wirehouses' asset market share by 6.7% since 2007. That's down from nearly 50% before the recession. And now Cerulli is predicting a further 7% loss by 2015.

Certainly, the biggest firms expected to lose some headcount when they began restructuring. The wirehouses decided to cut down payouts and prioritize high-profile teams, while leaving mid-level advisors to seek appreciation elsewhere. But the losses have been greater than management planned, according to Cerulli.           

"Wirehouse executives must find a way to cap unintended losses by retaining the most productive advisors," the report said. However, it warned that retention and recruiting bonuses are not the answer, serving only to create an environment in which advisors sell themselves to the highest bidder, and leap to the next highest bidder once their contracts have expired.

What's more, as independent channels mature and are increasingly able to match the amenities of wirehouses, their siren song of ownership becomes more tempting. "Executives must refocus on a wealth management centric culture, industry leading technology, flexible employment options for their advisors and resolve their training and hiring issues to fend off the challenges eroding their marketshare," the report advised.

Separately, the report noted that asset managers are having a tough time selling their products across all intermediary channels, thanks to challenges including increased competition and broker/dealer profit sharing concessions. For that reason, some have begun to give wirehouses shorter shrift. And Cerulli is advising them to continue on that path. Specifically, the report recommends that asset managers give extra attention and resources to the channel that has benefitted the most from the movement of advisors: RIAs. The report notes that last year the RIA channel added assets at a rate of 15%, and boosted headcount 3%.

"This channel will continue to be a net beneficiary of advisor transitions and will have the ability to cater to higher end advisors now that established boutiques can recruit by offering products and services that rival wirehouse competitors," the report said.

The annual report is based on surveys with 6,000 advisors across all channels, up from the 1,500 advisors queried for the previous report. It discusses dynamics in the distribution of products across all channels, and examines advisor likes and dislikes, along with behavior towards a range of investment products, including retirement plans, 529 plans, insurance, managed account programs, mutual funds, annuities and alternative investments.