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Alternative Market Briefing

Cerulli study finds competition for asset managers fierce in RIA channel

Monday, April 02, 2012

Beverly Chandler, Opalesque London: Cerulli's annual Registered Investment Advisor-focused research study has found that there is increased competitiveness in the RIA channel as assets are significantly concentrated in the largest firms. Cerulli found that fewer than 1,500 of the more than 16,500 firms in the channel manage 90% of the assets, resulting in a short list of frequently targeted firms.

"More than 80% of RIA firms fall below the $100 million asset threshold used by many asset management distributors to justify sales focus. Asset managers searching for untapped markets will be unimpressed with the lack of assets at the lower tier of the RIA market," comments Scott Smith, head of Cerulli's intermediary practice.

The study found that while the RIA segment was once a bastion for small independent firms, assets have consolidated, causing the asset management distribution process, advisor portfolios, and product demands to evolve.

"Moving forward, we expect RIAs to adopt more formalized procedures for security selection approval. In response, asset managers will need to provide more robust training on advanced investment metrics to their sales teams to assure that all possible placement opportunities are thoroughly explored," says Tyler Cloherty, analyst in the intermediary practice.

Cerulli’s survey measures the rate of ......................

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