Asset managers would do well to target "pockets of opportunity" outside of distribution given challenges in that space lately, says a recent report from Cerulli
One channel that managers may want to target, however, is RIAs, the only channel where the number of practicing financial advisors has not fallen. Though asset managers mostly focus on larger RIA firms for their distribution efforts, mid-sized RIAs may be more desirable since they are larger consumers of mutual funds and ETFs. They also lack comprehensive wholesaler support, which they compensate for by pulling resources from third-party software, publications, and asset manager support, Cerully analysts noted.
Cerulli analysts also observed several trends in the asset management space, including the rise of passive management. Though the active fund market is significantly larger than its counterpart, inflow for ETFs and mutual funds were $165 billion compared with $9 billion for active funds. Managers may have difficulty breaking into passive investing but could find opportunities for actively managed products to work alongside passive products within a client portfolio.
Financial advisors are also becoming increasingly specialized, which analysts see as a sign that the profession has been maturing. The focus on specific client niches and the move into team practices can increase the quality of advice delivered to investors, analysts said.
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