Filed Under:Life Insurance, Life Planning Strategies

Tiburon forecast: fee-based advisors' AUM to rocket to $5.2 trillion by 2017

Fee-based financial advisors’ assets under management will increase to $5.2 trillion by 2017, up almost 100 percent since 2011, according to a new report.

Tiburon Strategic Advisors discloses this finding in “Fee-Based Financial Advisors (RIAs): The Fastest Growing Financial Services Market and Distribution Channel.” Part of Tiburon’s Financial Institutions Research Series, the report analyzes the market for fee-based RIAs, including historical and projected numbers of fee-based financial advisors and their number of clients, accounts, and assets under management.

The study projects that the number of fee-based financial advisors will reach 19,009 by 2016, up 20 percent since 2011; and that the number of partners at fee-based financial advisors will reach 51,878 by 2016, up 20 percent since 2011.

The report also reveals that three-quarters of fee-based financial advisors expect to growth their client assets 10 percent or greater per annum over the coming three-to-five years.

Among the report’s key findings:

  • The number of fee-based financial advisor custodians will decline to 35 by 2016 as several more niche players will exit the business;
  • The number of fee-based financial advisors served by custodians will reach 27,000 by 2016, up 30 percent from 2011;
  • The number of end clients served by fee-based financial advisor custodians will increase to 3.2 million in 2016, up over 50 percent from 2011;
  • The number of accounts served by fee-based financial advisor custodians will increase to 10.4 million by 2016, up 70 percent from 2011;
  • Fee-based financial advisor custodian assets under administration will increase to $14.0 trillion by 2016, up 250 percent from 2011;
  • Fee-based financial advisor custodians’ revenues will increase to $28.0 billion in 2016, up 250 percent from 2011;
  • Fee-based financial advisor custodians’ net profits will increase to $4.2 billion by 2016, up 250 percent from 2011;
  • The three largest fee-based financial advisor custodians will expand their market share of fee-based financial advisor clients to 81 percent in 2016, up from 67 percent in 2011;
  • The three largest fee-based financial advisor custodians will expand their market share of end clients to 81 percent in 2016, up from 67 percent in 2011;
  • The three largest fee-based financial advisor custodians will expand their share of accounts served by fee-based financial advisor clients to 81 percent in 2016, up from 67 percent in 2011;
  • The three largest fee-based financial advisor custodians will expand their market share of assets under administration for fee-based financial advisors to 34 percent in 2016, up from 20 percent in 2011;
  • The three largest fee-based financial advisor custodians will expand their share of net profits earned by fee-based financial advisor custodians to 34 percent in 2016, up from 20 percent in 2011;
  • Fee-based financial advisors will continue to use mutual funds, but also increase their utilization of exchange-traded funds, alternative investments, and wealth management products;
  • There will be three fee-based financial advisor mergers and acquisitions models including strategic buyers, financial buyers, and membership organizations.
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