Advisor Profit Margins Up

The median profit margins of investment advisors, both pre- and post-marketing costs, rose in 2011, according to Lipper’s latest research report, Investment Management Profitability Analysis for 2012.

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According to the report, the median pre-marketing margin for investment advisors rose to 43.85% in 2011, from 40.17% in 2010. Meanwhile, the before post-marketing margin also rose to 34.44% in 2011, compared to a margin of 32.26% in 2010.

Moreover, the median post-marketing profitability margin surpassed recent medians to reach the highest value in nine years.

Post-marketing, the margins of the top five advisors that directly advise funds were Cohen & Steers Capital Mgmt, at 57.91%; T. Rowe Price Group, Inc., 44.66%; SEI Investments, at 41.81%; Artlo Global Investors, at 40.83%, and Calamos Asst Mgmt, at 39.84%.

Other companies that don’t directly advise funds, but do serve as sub-advisors, were also included in the report, such as Morningstar, with a margin of 46.58%; Pzena Investment Mgmt, at 45.58%, and Epoch Holding Corp., at 40.73%.

Tommy Fernandez writes for Money Management Executive.