December 2014, Boston. New research from global analytics firm Cerulli Associates finds that a limited group of strategic acquirers will continue to reshape the advisory industry, forcing asset managers to adapt.
"Wealth management firms and asset managers with retail third-party distribution understand the risk associated with an aging advisory population and few solutions on the horizon," states Bing Waldert, director at Cerulli. "Forward-looking firms are attempting to grasp the long-term implications of advisor retirements and what this means for the wealth management industry's future."
"The next wave of consolidation is likely to happen at a far more local level, with large, well-run individual advisory practices becoming the beneficiaries of advisor retirements," Waldert continues. "Ground-level consolidation to mega teams is already beginning. Other distribution channels are further along the path to localized consolidation and provide a model for how the industry could evolve."
"Within the third-party administrator (TPA) and structured settlement industries, owner-operators are beginning to sell their businesses as part of a succession plan, creating locally, regionally, and even nationally dominant franchises," Waldert explains. "These firms' centralized, shared services model provides a framework for future financial advisor consolidation."