Winter Retail Brokerage and Fee-based reports look at Advisor Managed business

Every down market witnesses important changes in the acceptance of 
new and different ways of doing business. These changes have often 
proven to be the forerunner of important sources of growth and 
structural change when markets move higher. It is in that context 
that Advisor Managed, the growing trend of full-service brokerage 
advisors operating as discretionary money managers, warrants close 
attention by industry participants. The numbers underscore this view. 
At the end of 2008, discretionary advisor managed assets stood at 
just over $28 billion—5% of the full-service brokerage channel’s 
assets under administration. The growth measures show a three-year 
30% CAGR in this segment, compared to -2% for the channel’s overall 
assets. In terms of future growth potential, of note is the fact that 
nearly 11% of all client-facing advisors are participating in these 
programs—and the numbers of converts has been growing strongly. 
Clearly something is happening here.

Over the past few months, Investor Economics researchers have engaged 
in a comprehensive review of the state of the Advisor Managed 
business, gathering data and insights on all aspects of the business. 
The findings of our research are so extensive that they are being
presented as special features of two Investor Economics studies—the 
Winter 2009 issue of The Retail Brokerage Report, which is now 
available for subscriber download, and the Winter 2009 issue of The 
Fee-based Report, which is slated for release later in March. These 
studies will differ in focus, with The Fee-based Report addressing 
more of the strategic, regulatory and competitive aspects in the 
broader context of servicing higher net worth clients. In The Retail 
Brokerage Report, the focus is more on program specifics, and 
operational, compliance and portfolio management issues.

Should there be interest in more information, contact Earl Bederman, 
President of Investor Economics, or Guy Armstrong, Senior Consultant.