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Over the past decade, the percentage of traditionally advised client assets residing within fiduciary accounts, either a broker/ dealer (B/D) affiliated managed account or as a standalone registered investment advisor (RIA), increased from 40% to an all-time high of 56% in 2023. The core benefits of a fiduciary relationship have increasingly become more appealing to investors and are driving growth across channels.

"Fiduciary relationships require provider firms and advisors to prioritize clients' best interests before their own, while making their best efforts to ensure they minimize the potential impact of conflicts of interest that could incentivize them to act sub-optimally on behalf of clients," says Scott Smith, director.

Given investor preference for ongoing engagement and fiduciary alignment, Cerulli expects the proportion of new assets directed into managed accounts to continue to increase. The wirehouse channel recorded 12-point growth (from 33% to 45%) over the last 10 years while the independent B/D channel recorded 26-point growth, climbing from just 24% to 50% by year-end 2023.

"Considering the benefit of fiduciary coverage that clients expect coupled with sponsor firms' preference to align their future revenues with client asset growth rather than with the transaction generation of brokerage accounts, Cerulli projects increased reliance on managed accounts within the wealth management industry for the foreseeable future," he concludes.