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Wirehouse Advisors Lead in High-End Services, Study Shows

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Looking at the range of services received by clients in all advisory channels, traditional wirehouses take the lead in catering to high-end client needs, according to recent data.

At wirehouses, 90% of clients received estate planning services in the third quarter of 2014, according to new research from Cerulli Associates. That compares to 83% of regional broker-dealer clients, 76% of bank clients, 80% of independent B-D clients and only 66% of RIA clients.

With concierge and lifestyle services, 33% of wirehouse advisor clients received such services during the same period, compared to 12% among the clients of regionals, 17% among bank clients, 16% among IBD clients and 22% among RIA clients.

“Since 2010, wirehouses have focused on the largest advisors in the industry, and affluent investors,” says Kenton Shirk, associate director of Cerulli Associates. “With that, they are expanding service delivery, because that is what client service warrants. It is all very much rooted in the wirehouses’ desire to grow profitability. The strategy to get there is big advisors, big clients.”

The data was collected from a survey of 4,000 advisors explains Shirk, who also was the author of the report. The findings partly reflect the fact that traditional wirehouses, because of their size and resources, are able to offer more services to clients, he says. Also driving service delivery in the wirehouse channel, he adds, is competition between firms for highly affluent clients.


But the findings still illustrate the impact that focusing on affluent clients has had on wirehouse business, Shirk further explains. “Wirehouse advisors are 150% more productive than the average advisor across all channels in terms of assets under management per headcount. That’s really the result of the quality of advisor and focusing on and attracting affluent clients.”

The data shows nearly half of all wirehouse clients are receiving private banking services from their providers, an indication the firms are delivering more comprehensive financial offerings, Shirk says. According to the findings, wirehouses clients had the highest percentages in receiving charity planning and concierge services, again an indicator of client wealth and needs.

Surveying the most important financial goals among investors, Shirk says, only 3% of investors with more than $5 million in assets indicated it was college education financing. That figure rose to 9% among investors with less than $100,000 in assets.


But what is also shaping the bulk of services being received across all channels – retirement income planning, estate planning and elder care planning – is the percentage of aging clients, Shirk adds.

“Across all channels, if we look at the average age, nearly three quarters, 71%, of clients are age 50 and above,” he says, quoting Cerulli research on client demographics. “Among wirehouse advisors it is 78%. So it is fitting that there has been a greater focus on those services.

“For advisors building a service model, at the core is who their ideal client is and their key, hot button needs. Those types of services, such as retirement planning, are now core services needed across all levels of wealth.”


Notably, IBDs did not take a lead position in any of the services being received by clients, according to the data. Shirk says this is indicative of how the channel has fared against increased competition.

“What we’ve seen is IBDs are struggling because most large product advisors are being attracted to RIA and dually registered, which is one step towards the RIA model,” Shirk says. “The largest and most sophisticated practices are most likely to have a larger service set, attracting higher net worth clients. They are most likely shifting into to RIA and dually registered, and I think we are going to see more service in that direction.”

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