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Rapid consolidation has led to mega RIAs and aggregators controlling an ever-greater share of RIA assets, and asset managers have taken note, devoting more time and resources to service that channel, according to a new report from FUSE Research Network.
Asset managers of all sizes now allocate 37% of their total RIA coverage time to mega-size RIAs and aggregators. In addition, large asset managers (those controlling more than $100 billion in assts), which are devoting 63% of their RIA-focused time to aggregators.
“Asset managers are trying very hard to segment it into different categories to see where there are differences in what advisors need, want and how their relationship may differ,” said Loren Fox, director of research at FUSE Research Network. “There’s been an increasing use of whatever data is available to try and inform those distribution strategies. … We’ve seen aggregators emerge as their own segment in the RIA world, and this has clearly been noticed by the firms, and so they are looking and saying, ‘We need a different approach.’”
Furthermore, Fox said the findings reinforce a broader trend in which aggregators are increasingly coming to resemble large broker/dealers with centralized home offices. So, asset managers are engaging with them using a mix of approaches, including national accounts coverage for home offices and wholesalers for regional offices.
While FUSE’s research focused on traditional asset managers, Fox said the push for private markets is also part of the evolving dynamic.
“Some of the aggregators are particularly interested in bringing more alts exposure to clients,” Fox said. “Many of the asset managers see aggregators as having the scale and investment expertise to offer more sophisticated products as a way to differentiate themselves. That adds to the attractiveness to asset managers looking to expand in the space.”
In addition, Fox said he is watching to see what other value-add services asset managers may try to bring to the aggregators, including webinars, white papers or focused events.
“All of those are things that asset managers have been doing in the traditional space for wirehouses and IBDs,” he said. “Will aggregators start having big annual meetings where asset managers can be sponsors, presenters and things like that. We’re starting to see that here and there.”
FUSE compiled the research by conducting interviews with sales leaders at 30 different traditional asset management firms.
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