Fact-Based Trends from Cogent Reports™
The fee-based advisor segment is one of the only advisor segments that is growing, causing ripple effects on advisors’ product preferences. In Q1 of this year, four in ten (43%) advisors said they are predominantly fee-based (deriving at least 75% of their total compensation from asset-based fees). Most notably, nearly half (48%) of National wirehouse advisors report they are now predominantly fee-based, a significant increase from just over one-third (39%) last year. As National wirehouse advisors’ compensation models begin to more closely resemble RIAs’, we observe a corresponding decline in National wirehouse advisors’ allocations to actively managed investments, from 73% in 2015 to 67% this year.
In light of these trends, asset managers that have historically been more focused on commissioned advisors must now work to strengthen relationships with fee-based producers. Product providers are responding by adding new share classes and commission schedules in addition to promoting the value of active management in particular asset classes. Firms are also ramping up their engagement with gatekeepers at large brokers/dealers as industry observers anticipate a shift toward more fee-based managed account programs.
Want to know how your firm fares among fee-based advisors? Click here to learn more about our 2017 Advisor Brandscape report or download our webinar, Advisors Adapting to the New Normal.