3rd Annual Report on The State of Retail Wealth Management

ALL articles
By Alexei Miller
Finance Practice

Every year PriceMetrix prepares a report on The State of Retail Wealth Management in which we examine multi-year results for select performance drivers of the North American retail wealth management industry.

This report is the most accurate and objective assessment of the industry available: it is based on the aggregated data set comprised of detailed books and records data for over 35,000 financial advisors and 7 million retail investors. Please download the 3rd special edition here.

In 2012, Financial Advisors saw increases in assets and revenues, accompanied by a deterioration of the revenue generated from assets (RoA). Some of the causes of this RoA decrease are:

  • Equity transaction volumes per FA experienced a third year of decline,
  • FAs averaged $46,000 of equity commission discounts, discounts that they can and should reduce,
  • The pace of transitioning to fee based products slowed,
  • Of most concern, the aggregate price level on new fee accounts declined.

On a positive note, FAs reduced the number of households they serve, though only modestly. Our Insights Lab has documented for our subscription clients that a higher percentage of small households in FA books result in greater attrition rates of large households. It is a law of physics that executives can cause their managers to act upon.

What are our clients doing in response? They are:

  • Redesigning their equity commission schedules,
  • Sharing relevant fee benchmarking information with advisors, so they can avoid pricing mistakes,
  • Taking a harder approach to reducing the number of small households,
  • Balancing penalty compensation systems with reward systems, by moving from ‘discount sharing’ to ‘value sharing’,
  • Using Moneyball metrics to better coach their sales forces and improve recruiting results,
  • Training FAs and managers on how to have successful price dialogues with both new and existing clients.
Sign Up for Updates!

Subscribe now to receive industry-related articles and updates

Choose industries of interest
Thank You for Joining!

You will receive regular updates based on your interests. No spam guaranteed

Add another email address
Sign Up for Updates!
Choose industries of interest
Thank You for Joining!

You will receive regular updates based on your interests. No spam guaranteed

Add another email address
We are glad you found us
Please explore our services and find out how we can support your business goals.
Get in Touch
Download the white paper «Brave New World»: Information Technology in the Post-COVID Environment

DataArt experts and practice leaders examine the role information technologies will play in helping businesses across multiple industrial sectors respond to the «new normal» demands.