03.20.23
B-Ds Need To Embrace Lower-Cost Products To Survive, Cerulli Says
Broker-dealers are facing challenges as advisors look for lower cost, passive investment options that do not involve sharing fees with an asset manager, Cerulli Associates reports. If broker-dealers are to continue to succeed, they will have to adapt, the research and data provider said. Asset managers will need to make separately managed accounts, exchange-traded funds, environmental, social and governance-oriented products and other options that appeal to advisors’ needs, Cerulli said in the report. “Across all channels, approximately one-quarter of all advisors create custom portfolios for each client and nearly two-thirds of all advisors report that their primary portfolio construction influence comes from within their own practice,” Cerulli said. “However, as advisors confront margin pressures and scale, they are becoming increasingly conscious of the price they pay for access to investment strategies.”
Read the full article on Financial Advisor