This Is What Advisors Want From Their Asset Managers

A new report by Cerulli Associates looks at what asset managers need to do to add value for advisors.


Bigstock Photo

Advisors have a plethora of options when choosing asset managers — but there are ways for managers to differentiate themselves from the competition.

A new report by Cerulli Associates, a Boston-based research and consulting firm, indicates that asset managers need to move beyond product placement to secure new advisory relationships, and that some should look to the RIA channel to build their client base.

“Advisors consistently share that their best partners actively work to help address the most pressing challenges practices face, whether through digital tools, client-facing materials, or intelligence gathered by wholesalers,” said Andrew Blake, senior analyst at Cerulli, in a statement. The company surveys about 1,200 advisors annually and publishes quarterly reports on their responses.

The reasons that advisors gave for working with certain asset managers varied slightly, but the most important factor was the manager’s historical product track record, with 68 percent of respondents rating it “very important.” A consistent investing style (60 percent), firm reputation (56 percent), and quality of client service (52 percent) were the other top responses.

One of the biggest advantages that an asset manager can offer an advisor is the ability to provide resources that RIAs might not have access to on their own.

Despite the growing trend of multibillion-dollar RIAs, many of these advisors still lack the type of infrastructure seen at large wirehouses or national broker-dealers. For this reason, Cerulli argued that wherever possible, “asset managers should focus on filling gaps for RIA advisors.”

These gaps include offering portfolio and model construction services, which can be costly for smaller practices to implement on their own, and developing educational content in response to trends within the industry, such as the coming wealth transfer.

Despite the fact that the RIA industry collectively manages about $100 trillion in assets, some RIAs feel overlooked by asset managers.

Andre Jean-Pierre, founder of Aces Advisors, an RIA with about $10 million in AUM, left his job as an advisor at a Morgan Stanley in 2020. He told RIA Intel that since starting his firm in 2021, he’s often felt underserved by asset managers. “The relationship is totally different when you’re at the wirehouses,” he said. “They reach out to you. They do regular updates. They help with client events. They deliver a lot of value.” As a smaller RIA, he said he doesn’t get the same type of support anymore.

According to the report, the most valuable resources that advisors felt they received from asset managers were hearing about best practices from other advisors (43 percent); financial assistance for client events or seminars (40 percent); and support with advanced financial planning techniques (36 percent). “Asset managers do help you build your book, and they do help you scale your time,” Jean-Pierre said.

Jean-Pierre believes that RIAs can be a very profitable and loyal channel for an asset manager, since the industry growth rate far outpaces that of other wealth management channels.

“When you’re in a wirehouse channel, you’re meeting probably a different asset manager every week,” Jean-Pierre said. “I’m projected to go [from] under $10 million to probably $25 million [next year]. The year after that, somewhere around $55 million in AUM. So the small, newer RIAs become the billion-dollar managers.”

Related Articles