93% of the assets in the Broker/Dealers (B/D) channel are controlled by the 25 largest firms by assets under management (AUM) concentration, and the top 10 firms have increased their share of advisors to 62%, according to the latest U.S. Broker/Dealer Marketplace 2024 report by Cerulli.
As these companies aim to consolidate and expand their market position, advisory technology will become a strategic imperative and a key differentiator.
Over the past decade, the largest firms have taken advantage of their size, attracting more advisors to their platforms through technological enhancements and aggressive recruitment packages.
The quality of a B/D firm’s technology has proven to be a critical factor for both retaining advisors and attracting experienced advisors from other firms, the consulting firm’s report states.
Cerulli’s study concludes that advisors who switched firms in the past three years most frequently identified the quality of the firm’s technology (55%) as a key factor influencing their decision to join, followed closely by the quality of back-office support (53%) and compensation (49%).
“Investments in technology and administrative support can significantly enhance a firm’s appeal, making it a more conducive environment for advisors to thrive,” says Michael Rose, director.
Rose added that as the appeal of independent channels, which tend to offer greater autonomy and flexibility, looms as a competitive threat, a technology experience that empowers advisors to provide high-quality services and client experiences, while also enabling them to efficiently manage their business, is a powerful defensive and offensive strategy for B/Ds.
Overall, more robust technological infrastructure, better home-office support, and stronger resources for teams working in a collaborative structure are all factors that can enable scale. This allows advisors to work more efficiently, improve the range and quality of services offered to clients, and retain assets, summarizes Cerulli.
“However, scale alone does not guarantee enhanced platform capabilities,” Rose states, concluding that “broker/dealers will need to invest in the right technology to drive advisor growth and ensure a sustained advantage.”
