The independent broker-dealer (IBD) channel continued to lead advisor-managed asset growth in 2024, increasing 21.5% from a year earlier, ahead of captive BDs and RIAs, according to a Cerulli report, released Thursday.
That compared to 16.4% growth in the RIA channel, 13.4% growth among captive BDs and 15.3% among all retail financial advisor channels, the research firm said.
One major factor has been the IBD channel seeing the largest amount of consolidation over the past three years among the three advisor channels, increasing the scale and capabilities of the largest IBD firms, according to Cerulli.
Almost 50% of the 25 largest BD parent firms have multiple wealth management units and/or BD entities, the report said.
The report pointed out, “Some of these business units are the result of acquisitions that have occurred over time and which have not been consolidated, and some of them represent alternative business models and advisor affiliation structures.”
Also according to the report, advisor productivity correlates with firm size, with the five largest BDs by assets under management (AUM) having an average of $165 million managed per advisor as of Dec. 31, contrasting with an average of $135 million for the 25 largest BDs.
Examples of major acquisitions that occurred recently included LPL’s acquisition of Commonwealth Financial Network and Atria Wealth; the rebranding of Advisor Group as Osaic Wealth and the consolidation of its subsidiary BDs, as well as its acquisition of Lincoln Financial Network; Cetera’s acquisition of Securian Financial Services’ retail wealth business and Avantax; and JPMorgan Chase’s acquisition of First Republic, Cerulli’s report points out.
Due to consolidation, the IBD channel claims almost one-fifth of all financial advisor headcount and 16% of industry assets, Cerulli said.
“Assets and advisors have increasingly become concentrated in the hands of the very largest IBDs,” Michael Rose, Director, Wealth Management at Cerulli, said in a press release announcing the release of The Cerulli Report—U.S. Broker/Dealer Marketplace 2025.
“The five largest B/D firms control more than 80% of all B/D channel assets.” — Michael Rose, Director, Wealth Management, Cerulli
“The five largest B/D firms control more than 80% of all B/D channel assets,” he added.
As a result, Cerulli said the competitive dynamics have changed significantly, as the number of IBDs decreased by over one-third over the past decade, declining from 124 as of year-end 2014 to 79 as of Dec. 31, 2024.
Rose said, “We believe that mid-tier IBDs could be challenged to match the platform capabilities and resources offered by the largest firms, especially with the investments in platforms and home-office support capabilities the larger firms are able to offer.”
Cerulli said its research showed the top three factors attracting advisors to independence (including IBDs and RIAs) were higher payouts (91%), the ability to build financial value independently (75%) and increased autonomy (73%).
“If mid-tier IBDs remain nimble and focused on their unique value propositions, and make investments to strengthen them, Cerulli believes that there remains a place in the marketplace for firms of this size, though the competitive environment is becoming more challenging,” the firm said in the news release.
“Many IBD advisors prefer smaller, more boutique cultures, and the ability to have a direct line to senior decision makers,” added Rose.
Jeff Berman, Contributing Editor and Reporter at Wealth Solutions Report, can be reached at jeff.berman@wealthsolutionsreport.com.
