RIA Rising

What asset managers like, and don't like, about RIAs, in new BCG report

The registered investment advisor market is expanding, which makes it attractive to growth-minded asset management firms, but the fragmented nature of the RIA channel is also a challenge, my colleague Diana Britton reports here at Registered Rep.

A study by Boston Consulting Group says that about 15 percent of U.S. retail assets, or $1.5 trillion, are distributed through RIAs. The number is growing. But some asset managers are finding that it costs more to market to RIAs.

Larger advisor firms are benefiting from the competition among asset managers, says Gary Shub, partner of BCG’s financial institutions practice and a co-author of the report. Britton writes:

In fact, the bulk of 2010 net flows in the U.S. were concentrated among the top 10 asset managers, the report said. For the larger advisor networks, there’s an opportunity to take advantage of this increased competition between asset managers, Shub said. But smaller firms, such as IBDs and RIAs, should recognize the difficulty asset managers have in reaching them, as management firms typically take a more opportunistic approach to that market. Asset managers tend to focus their efforts on the larger, higher-volume purchasers, such as the wirehouses. But advisors at the smaller firms have to be more proactive about which products they want access to, he added. More than ever, clients want products that are customized or at least perceived to be tailored to their needs.

Read more about the BCG report, “Building on Success: Global Asset Management 2011,” by clicking here.

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