Asset managers could reap rewards by targeting RIAs with between $100 million and $500 million in assets under management, according to a new report from Cerulli Associates.
The research firm expects RIAs, including dually-registered advisors, to expand their share of advisor-held assets to 14 per cent by the end of this year.
Furthermore, the RIA channel is rated as the most profitable for asset managers due to lower sales and service costs than broker-dealer channels, says Cerulli. Additional benefits can be gained from product managers in the mid-sized RIA sector, the white paper lays out, due to the predicted growth trajectory in this sub-sector, as well as the landscape of sales support and product preference.
Asset managers invested around 16 per cent of resources to the RIA channel in 2011, but most are focused on the largest firms, while mid-sized firms have been “an enigma” to the industry, Cerulli says.
“Primary sales challenges of access and organizational influence are removed when dealing with mid-sized RIAs,” said Tyler Cloherty, senior analyst at Cerulli Associates. “Since the average advisor within the RIA channel managed $63.7 million in 2010, they are attractive targets for asset managers.”