Wholesalers Boost Sales to RIAs, Still Don’t Connect
About 14% of RIAs saw a significant uptick in wholesaling activity over the past two years, while a further 36% saw a moderate increase and 12% saw a minimal increase, according to GDC, which conducted an online survey with close to 150 RIAs and followed up with 35 in-depth interviews with RIAs, RIA custodians, asset managers, mutual fund firms and related industry vendors.
But wholesalers, despite working with RIAs for decades, are still having trouble differentiating themselves from the competition because the RIA market is “unique and different” from wirehouses, independent broker-dealers and regional firms, GDC writes.
RIAs are also far more decentralized, fragmented and resistant to traditional sales models because of their position as fiduciaries, according to GDC.
Wholesaler tactics may very well change, however, given the size of the wealth management industry commanded by RIAs — about $2.5 trillion in assets, according to the report. GDC suggests wholesalers who want to connect with RIAs will need to fine-tune their tactics, better identify which RIAs to target with which products, and how to add value.