The 10-Largest B/Ds Control 58% of all B/D Assets Under Management

October 2, 2024 — Boston

The need to invest in technology to attract and empower advisors will continue to be a top driver in the pursuit of scale and continued growth among B/D firms

Driven largely by merger and acquisition (M&A) activity, the broker/dealer (B/D) marketplace has experienced significant consolidation over the past decade-plus. According to Cerulli’s latest report, U.S. Broker/Dealer Marketplace 2024, 93% of B/D channel assets are controlled by the top-25 firms by assets under management (AUM) and the 10-largest B/D firms have increased their share of B/D advisor headcount to 62%. As these firms look to uphold—and grow—their market position, advisor technology will become a strategic imperative and important differentiator.

Over the last decade, the largest firms in the channel have seized the opportunity to reinforce their size, attracting more advisors to their platform through technology upgrades and aggressive recruitment packages. The former—the quality of a B/D firm’s technology—has proven to be a pivotal factor both for retaining advisors and luring experienced advisors away from their current firms. Cerulli’s research finds advisors who switched B/D firms within the last three years most frequently identify the quality of a firm’s technology (55%) as a factor that influenced them to join their B/D, just ahead of the quality of back-office support (53%) and compensation (49%).

“Investments in technology and back-office support can significantly enhance a firm’s attractiveness, making it a more conducive environment for advisors to thrive,” says Michael Rose, director. “As the allure of independent channels, which tend to offer greater autonomy and flexibility, looms as a competitive threat, a technology experience that empowers advisors to provide a high-quality service offering and client experience, and that makes it easy for advisors to run their business efficiently, is a powerful defensive and offensive strategy for B/Ds.”

Overall, more robust technology infrastructure, better home-office support, and stronger resources for practices operating in a team structure are all factors that can enable scale, allowing advisors to work more efficiently, improve the range and quality of services they offer clients, and retain assets. “However, scale alone is not a guarantor of improved platform capabilities,” says Rose. “Broker/dealers will need to invest in the right technology to empower advisor growth and secure a sustained advantage.”

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