The share of retail client assets that make up the U.S. professionally managed market has grown over the past decade, in part thanks to broker-dealers shifting to fee-based financial planning, according to a recent report.
Professionally managed assets in the U.S. reached $51.5 trillion in 2019, with 53.8% of them in institutional client assets, Cerulli Associates found. And while retail client channels still account for less than half of professionally managed assets, their share has grown 5.2% since 2009, according to a recent report from the research firm.
Cerulli notes that brokers are increasingly transitioning to a fee-based approach, adopting model portfolios and stressing financial planning and holistic advice.
Cerulli also found that the role of third parties in asset management keeps growing. In the retail client channel, 74.3% of assets moved through third-party distribution in 2019, up from 72.8% in 2009, while the share of institutional client assets moving through intermediaries grew from 45.6% to 53.6%.
“Centralized influence points, such as investment consultants and broker-dealer home offices, can help amplify distribution efforts as they provide a single point of contact for what is the potential of multiple client relationships,” Cerulli associate director Brendan Powers says in a statement.
Powers also says that investors are growing more interested in investments outside traditional asset classes, such as open-end mutual funds and institutional separate accounts.
However, open-end mutual funds accounted for 31.7% of U.S. professionally managed assets in 2019, according to the report. Institutional separate accounts, meanwhile, made up 22.4% of U.S. professionally managed assets, Cerulli says.
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