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How The Adviser Shortage Creates An Opening For Independent RIAs
Broker/dealers struggle with technology
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Happy Sunday, and welcome to Benzinga’s financial advisor newsletter of 2025!
Today, we’re looking at the surge in assets under adviser management, why its not accompanied by a surge in the number of advisers, and what different kinds of adviser firms can do to capitalize on it.
So, let’s get to it!
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INDUSTRY CHATTER
Assets managed by advisers continued to grow in 2023, hitting a record $31.3 trillion, according to a new report from Cerulli Associates. However, the number of advisers managing all that money has not been growing nearly as fast. Over the last ten years, the report indicates the number of registered advisers has increased by just 0.2%.
This shortage of manpower and abundance of work hasn't so far affected client satisfaction scores. 80% of clients say they are happy with their adviser. But dig a little deeper and the manpower shortage may be affecting what kind of advisors people seek out.
Independent RIAs Are Gaining Market Share
According to the report, independent RIAs have increased their market share (by assets managed) from 12% to 16% over the last decade. Copmanies managing more than $500 million are growing especially fast, and now have 67% of the industry's managed assets. Almost half of those firms are considering acquiring other advisers.
For broker/dealers with advisers, this is an issue. 68% of advisers say they have trouble learning or using their own broker/dealer's technology. At the same time, the report indicates that 71% of new advisers strike out in the first five years of work. This suggests that to win back market share from independent RIAs, who appear more appealing to clients, broker/dealers must invest more heavily in training, mentoring, and technology for new advisers.
Nimble Technology And Financial Planning Are The Winning Combination
On the other hand, independent advisers may want to double down on their use of technology, knowing that one of their competitive advantages lies in nimbler, easier to use, and more client-friendly systems.
Another competitive advantage the report identifies is in offering financial planning services for investors. Currently, only 48% of advisers provide such services, demand is high and Cerulli expects that number to hit 55% next year. Advisers who get ahead of the pack may find this a key differentiator against their competitors.
MARKET RECAP
Wall Street hit new records as Donald Trump began his second term as 47th U.S. president this week.
The S&P 500 index — as tracked by the SPDR S&P 500 ETF Trust (SPY) — climbed above 6,100 points, surpassing its previous December peak and marking a second consecutive week of gains, fueled by a strong start to the fourth-quarter earnings season.
Tech stocks led the market again, driven by semiconductors’ momentum and a surge in artificial intelligence investments. Trump launched the Stargate project, aligning OpenAI, SoftBank and Oracle Corp. (ORCL) to channel up to $500 billion over four years into AI infrastructure.
Shares of both Oracle and SoftBank-owned Arm Holdings plc (ARM) jumped 15% this week in response to the announcement.
Speaking at the World Economic Forum on Thursday, Trump vowed to make the U.S. the “world capital of artificial intelligence and crypto.” He also signed an executive order while fostering U.S. leadership in digital assets. Bitcoin (BTC/USD) soared to a record $109,000 at the start of the week, holding steady in a tight range thereafter.
Moderna Inc. (MRNA) emerged as the week’s top performer, skyrocketing 25% after securing a U.S. government contract to fast-track its bird flu vaccine development. Netflix Inc. (NFLX) followed suit with a 15% surge after blockbuster fourth-quarter results.
In contrast, renewable energy stocks came under heavy selling pressure following the removal of pro-renewable executive orders and of electric vehicle subsidies. First Solar Inc. (FSLR) took the brunt of the hit, tumbling double digits as investors priced in a policy-driven shift away from government-backed clean energy initiatives.
Apple Inc. (AAPL) was the big tech laggard of the week, missing out on the rally following analyst downgrades and warnings about weak iPhone sales in China.
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Inflation Hits Confidence
U.S. consumer confidence fell in January amid rising inflation worries linked to tariffs. According to the University of Michigan survey, consumers opted to buy in advance to avoid future price pressures, sustaining strong auto and retail sales.
Inflation Risks Mount
Goldman Sachs warns that Trump’s potential tariff hikes could elevate consumer inflation expectations, complicating the Federal Reserve’s interest rate reduction plans. A universal 10% tariff might boost headline inflation by up to 1 percentage point, according to Goldman.
THE WEEK AHEAD
Economic Data
Monday: US new home sales for December
Tuesday: Australian inflation numbers, US consumer confidence
Wednesday: US interest rate decision
Thursday: EU GDP, Japan inflation, US GDP and initial jobless claims
Friday: German inflation and preliminary unemployment
Earnings
Tuesday: General Motors (GM), Sysco (SYY), Lockheed Martin (LMT), Boeing (BA)
Wednesday: Microsoft (MSFT), Meta Platforms (META), Tesla (TSLA), T-Mobile (TMUS)
Thursday: Apple (AAPL), Shell (SHEL), Cigna Group (CI), United Parcel Service (UPS)
Friday: Exxon Mobil (XOM), Chevron (CVX), Novartis (NVS), Colgate-Palmolive (CL)
Click here for the full calendar of economic data and earnings reports.
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