Asset class leads wealth managers to meet more wholesalers

Private wealth managers, including RIAs, are more interested in engaging with asset manager wholesalers, according to a new Broadridge survey shared exclusively with Intel RIA.

The survey found that 34% of financial advisors want more engagement with external wholesalers, up 25% from spring 2021. Much of this demand is driven by so-called wired advisors employed by Bank of America’s Merrill, UBS, Morgan Stanley. , and Wells Fargo. But 21% of RIAs also plan to engage more with wholesalers this year, up 6% from last year.

Matt Schiffman, distribution knowledge manager at Broadridge, believes the growing willingness of advisers to engage wholesalers is driven by their growing interest in alternative investments. Global alternative assets under management are expected to grow by 60% to $17 trillion between the end of 2020 and the end of 2025, far exceeding global GDP and inflation rates, according to alternative research and data firm Prequin.

“There’s increased interest in new vehicles and different investment vehicles that are coming in, more specifically private equity alternatives,” Schiffman said. “These non-traditional investments require more education and more information to be able to use them effectively and correctly with the right customer and for wholesalers to add value to them.”

Intermediaries are also profiting from the growing interest in alternative investments. CAIS, an alts platform used by over 5,000 advisory firms, raised over $325 million from investors in 2022. And CAIS competitor iCapital, also used by thousands of advisors, has been valued at $6 billion in a funding round raised late last year. . The Chartered Alternative Investment Analyst (CAIA) Association has also seen an increase in the number of security holders and recently launched its own training platform to help educate financial advisers who want to learn more about alternatives.

Wirehouse advisors and independent RIAs ranked wholesaler interactions and educational content as the first or second most valued resource for asset managers. Access to portfolio managers and consultants was the second most valued resource, particularly among RIAs.

The survey “shows us that while RIAs generally do not place as much importance on engagement with external wholesalers as with other channels, they still see the intellectual capital residing in asset management at that they want to access and they want to do it through content education,” Schiffman said.

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Advisors also want to change the way they interact with asset managers. Most communication takes place over the phone (37%) or through email, a website or other digital means (28%). In-person meetings accounted for only 18% and conferences accounted for even fewer interactions.

It could have been the result of the ongoing pandemic. New variants of Covid-19 continue to lead to an increase in the number of cases and canceled events. Some advisors might also just be uncomfortable meeting at big events and choosing not to.

Only 5% of advisors surveyed by Broadridge wanted to reduce their face-to-face interactions with asset managers. Most want the frequency to stay the same, and 33% said they want to have more in-person meetings. Some of them would like these interactions to happen at conferences; 27% wanted more interactions with asset managers at the conference, while 70% wanted it to be that way.

Advisors would also like to have more video conferences with asset managers.

The Broadridge study was conducted by 8 Acre Perspective, which surveyed 400 financial advisors in March 2022.

Holly Deaton (@HollyLDeaton) is a writer at RIA Intel and based in New York.

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Dolores W. Simon