Clients expected to move $800B as advisers change firms

An estimated $800 billion in total client assets will be transferred across the investment advisory industry because of brokers and advisers’ changing firms this year, according to a study from Cerulli Associates Inc.

The majority of transferred assets will be moved from a firm to another like it, Cerulli noted, as most advisers stay in the same segment of the advisory industry when they change jobs.

But wirehouses are expected to experience a total loss of $188 billion in assets as a result of brokers’ migration to other channels, the study estimated.

Insurance and regional channels are expected to experience net losses of $13 billion and $6 billion respectively.

The biggest beneficiaries, said Scott Smith, a senior analyst at Cerulli, will be dually registered advisers, who are expected to capture $60 billion in transferred client assets this year.

Registered investment advisers, meanwhile, will gather another $50 billion, while the independent broker-dealer channel will also see its assets increase by $50 billion, Mr. Smith added.

“Many advisers want to run their own business and not have the proprietary product concerns that they would have working for a large firm,” Mr. Smith said.

“Advisers are also reporting brand deterioration for some of the larger firms. The bailouts in the industry have had an impact on investors. Some are uncomfortable about putting their assets with a firm that has its own concerns about its operations,” Mr. Smith said.