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Women have a lot of reasons to plan for Chronic Illness Care.
Women have a lot of reasons to plan for Chronic Illness Care.
Women have a lot of reasons to plan for Chronic Illness Care.

Advisors Who Specialize Manage More Assets



A new report by Cerulli Associates finds that specialist advisors manage twice as many assets per advisor compared to their generalist peers. The study also finds that while specialization narrows an advisor’s market, it improves that advisor’s success in developing business by articulating a tailored service.

“Although practiced by a minority, specialization helps generate gains in asset aggregation,” said Scott Smith, director at Cerulli Associates in Boston, writing in The Cerulli Edge: Advisor Edition, issued earlier this month. “Specificity in marketing and in personal interactions throughout the business development process yields results that differentiate from generalist practices.”

Only 15 percent of advisors tailor their business to a particular clientele, such as a high net worth client, institutions or retirement plans.

Though specialist practices make up only 15 percent of total advisor headcount, this minority manages 29 percent of asset market share, Cerulli said. By contrast, generalist practices make up 85 percent of headcount, and manage 71 percent of asset market share.

The imbalance makes specialist advisors particularly lucrative distribution partners, Cerulli also said.

Advisors who specialize cite relevancy as a key factor in their success, and the model is based on the feeling that many advisors would rather be “very relevant to a few” clients than “moderately relevant” to many, Cerulli said.

Broker-dealers should encourage specialists by providing experts who can coach teams that can evolve into specialized practices, the report said. Nearly two thirds of retirement specialists operate as part of a team and that allows them to specialize.

“Teaming should also be encouraged, as it often sparks the ability for an advisor to develop a specialty while delegating nonessential activities to team members,” the Cerulli Edge report said. Asset managers can also do a better job of catering to the “unique needs of the specialized practices,” the report also noted.

True specialists or wealth managers offer estate planning, advice on charitable giving and trust services, in addition to portfolio management and product selection. Serving these specialty needs is harder than it seems because of the expertise and licensing required, the report said.

Too many advisors think they can serve the high net worth segment and such “aspirations are often not fulfilled,” as few practices are prepared to properly advise this kind of client and deliver the requisite level of service, the report also said.

Advisors Guide to Selling IUL

A majority of advisors (55 percent) believe they are financial planners, but that percentage is closer to 33 percent, according to Cerulli’s criteria. Similarly, 11 percent of advisors seem to think they qualify as wealth managers, but that percentage is closer to 3 percent, Cerulli said.

is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].


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Advisors Guide to Selling IUL