Get documents about "State of Managed Accounts Cerulli
W
Description
State of Managed Accounts Cerulli document sample
Document Sample
CERULLI QUANTITATIVE UPDATE SUBSCRIPTION
MANAGED ACCOUNTS 2010
This annual update (in its eighth iteration) examines the $1.9 trillion managed account industry and the impact of the recent market downturn and sub-
sequent recovery. It analyzes the trends driving change in fee-based managed accounts and advice delivery, including in-depth coverage of the six man-
aged account programs: Unified managed accounts (UMAs), separate account consultant programs, mutual fund advisory, rep as advisory, rep as port-
folio manager, and ETF advisory.
This report allows firms to: INSIDE LOOK:
• Examine the size and growth potential of the Key findings: This report addresses:
managed account industry by program
• Mutual fund advisory program assets surpassed separate account consultant programs for Sponsors: program specifics
• Evaluate advisor usage of and attitudes about the first time since Cerulli began tracking them in 1994. and channel comparisons
managed account programs • Despite mergers in 2009, the wirehouse channel continues to lose marketshare to other Advisors: managed account
channels, with regional broker/dealers gaining the most marketshare since 2008. usage trends and attitudes
• Assess the effects of mergers and
acquisitions on each distribution channel • While a large majority of advisors have access to UMA programs, the adoption rate Asset Managers: separate
remains low for these programs. account landscape and
• Benchmark their programs against distribution opportunities
comparable programs • The outlook for the managed account industry remains positive and is predicted to reach across programs
$3.59 trillion by year-end 2014.
• Develop programs that cater to the strengths • Rep-driven programs continue to capture assets due to the flexibility they provide advi-
and concerns of advisors sors, in comparison to the more packaged programs. Report purchase includes:
• Understand UMA and model portfolio trends • 5 hardcopies
Exclusive data:
• Online access
• Total managed account market sizing, 1994-2Q 2010 • Exhibits in Excel format
This report contains 205 exhibits and 266 pages. • Total managed account industry projections, 2010E-2014E • Key findings in PDF format
It includes the following chapters: • Rankings of top managed account program sponsors and separate account asset managers • Analyst access
1. Introduction To Managed Accounts • Gross sales and redemptions for all managed account programs
For pricing, please contact:
2. Separate Account Consultant Programs • Top mutual fund and ETF complexes used across managed account programs Marketing & Business Development
3. Mutual Fund Advisory Programs CAmarketing@cerulli.com
Sample Exhibit: Rep-As-Advisor Program Average Account Size, 2005-2Q 2010
4. Rep-As-Portfolio-Manager Programs +1 617-437-0084
$350,000 $331,023 40%
5 Rep-As-Advisor Programs $286,249 $295,203
$300,000 $277,309 19.4% $275,983 30% Quantitative Updates are subscription-
6. Unified Managed Account (UMA) Programs $251,970 20% based and include online access to a
$250,000 10.1% $224,190
7. Program Sponsor Channel Analysis 27.7% database of prior annual releases of this
$200,000 3.1% 10%
8. Separate Account Asset Managers -6.5% 0% report and related Thematic Reports.
$150,000 See page 3 for details.
9. Advisor Metrics -32.3%
-10%
$100,000
10. Mergers and Acquisitions -20% WWW.CERULLI.COM
$50,000 -30%
$0 -40%
2005 2006 2007 2008 2009 1Q 2010 2Q 2010 Cerulli Associates
Table of contents, user examples, and sample Average account size Growth rate Boston • Singapore • London
exhibits are included in this attachment.
Source: Cerulli Associates November 2010
CERULLI QUANTITATIVE UPDATE SUBSCRIPTION
MANAGED ACCOUNTS 2010
USER EXAMPLES:
The following are examples of how this report can be applied to business planning and strategic decision-making:
Scenario 1: An asset manager is hoping to increase its managed account assets by distributing its strategies via model portfolios and wants to learn
more about the distribution potential within UMAs. Cerulli Quantitative Update: Managed Accounts 2010 answers the following questions:
• Which channels have the most UMA assets sourced through model portfolios?
• What are average account sizes and investment minimums for UMA accounts?
• What sponsors have the largest and fastest growing UMA programs?
Scenario 2: An independent broker/dealer with mutual fund advisory programs wants to expand its managed account offerings to make their platform
more attractive for potential recruits. Cerulli Quantitative Update: Managed Accounts 2010 answers the following questions:
• What types of programs are most prevalent in other distribution channels?
• What characteristics of managed account programs are most attractive for advisors?
• What programs have gained the most assets over the past six months?
Scenario 3: A program sponsor wants to benchmark their managed account programs against their peers and examine how the recent merger activity
has changed the competitive landscape. Cerulli Quantitative Update: Managed Accounts 2010 answers the following questions:
• How has my firm’s total managed account assets and marketshare ranking changed over time?
• How has my channel’s marketshare been affected by merger activity?
• How does the managed account penetration rate at my firm compare to other firms within my channel and across the industry?
MORE INFORMATION:
Scenario 4: A third-party vendor offering managed accounts solutions wants to understand which channels and firms should be the focus of their mar-
To learn how to apply this report
keting and sales efforts. Cerulli Quantitative Update: Managed Accounts 2010 provides the following answers:
to your firm’s unique needs,
please contact: • How are UMAs evolving?
• Which channel is the best fit for outsourced manager research and due diligence?
Marketing & Business • What are the impediments to growth across the various managed account programs?
Development
+1 617-437-0084
CAmarketing@cerulli.com
CERULLI QUANTITATIVE UPDATE SUBSCRIPTION
MANAGED ACCOUNTS 2010
A subscription to Cerulli Quantitative Update: Managed Accounts 2010 remains active Please contact me about this report.
Report purchase includes: through 10/31/2011 and includes online access to the 14 related reports below at no cost. Fax completed form to +1 617-437-1268.
• 5 hardcopies See the green Purchase tab on www.cerulli.com for more information on these reports.
• Online access
• Exhibits in Excel format 1. Cerulli Quantitative Update: Managed Accounts 2009 Name: _________________________________________
• Key findings in PDF format 2. Managed Accounts: Economics of Asset Managers, Sponsors, and Advisors
Title: _________________________________________
• Analyst access 3. Cerulli Quantitative Update: Managed Accounts 2008
4. Cerulli Quantitative Update: Managed Accounts 2007 Email: _________________________________________
5. Managed Accounts: Impact of Overlay on Asset Managers 2007 Phone: _________________________________________
6. State of Managed Accounts 2006
Firm: _________________________________________
7. Cerulli Quantitative Update: Managed Accounts 2006
8. Managed Account Groups: Impact on Future Distribution 2005 Division or Business Unit Name: _______________________
9. Cerulli Quantitative Update: Managed Accounts 2005 _______________________________________________
10. Opportunities and Challenges for Third-Party Vendors 2005
Quantitative Updates are sub- 11. Cerulli Quantitative Update: Managed Accounts 2004
scription-based. Your purchase 12. Cerulli Quantitative Update: Managed Accounts 2003
includes online access to a data- 13. Managed Accounts: The State of Broker/Dealer Programs 2002
base of prior report releases and 14. Asset Management: Operations and Profitability Benchmarks for Separate Account
related Thematic Reports.
Consultant Programs 2002
Please contact Marketing & Business Development to learn more about pricing.
+1 617-437-0084
CAmarketing@cerulli.com
CERULLI ASSOCIATES Special Feature:
One Exeter Plaza
To view a thumbnail view of the contents of this report, please visit our website at www.cerulli.com.
Boston, MA 02116
Tel: +1 617 437 0084 Go to Reports and click on ‘view’ next to the report title.
28 Maxwell Road EXHIBIT 1.11 EXHIBIT 3.10 - PART 2
Top-10 Mutual Fund Advisory Program Sponsors, 2003-2Q 2010 - Part 2
EXHIBIT 4.09
Rep-As-Portfolio-Manager Program Average Annual Client Fees, 2000-2Q 2010
EXHIBIT 6.14
UMA Assets by Channel, 2006-2Q 2010
Managed Account Discretionary vs. Nondiscretionary Assets (Excluding Separate Accounts) by Channel, 2Q 2010 Source: Cerulli Associates
Singapore 069120
Source: Cerulli Associates ($ billions) Source: Cerulli Associates
Source: Cerulli Associates
1.50% 1.44% 6%
100% 2007 1.38% 1.40% 1.37% 0.3% 2.5% 0.6% 1.2%
Rank Firm 2007 AUM Rank Firm 2008 AUM 2008 Marketshare 100%
Marketshare 4.3% 1.30% 5.3%
13.7% 2,5 2,5 1.27% 1.27% 1.26% 1.25%
1 Ameriprise Financial $69.0 12.7% 1 Ameriprise Financial $52.0 13.3% 1.21% 1.22% 4% 12.3%
15.7%
29.7% 31.9% 2 Wells Fargo Advisors $65.4 12.1% 2 LPL Financial
3,4
$47.7 12.2% 2.4% 26.8% 18.0%
25.9%
80% 3 Fidelity Investments $58.9 10.9% 3 Fidelity Investments $45.0 11.5% 80%
46.6% 49.2% 2% 2.4%
16.0%
3,4 15.4%
55.3% 4 LPL Financial $55.9 10.3% 4 Wells Fargo Advisors $36.7 9.4% 1.00% 0.9% 2.5% 3.2% 1.8% 2.9%
Tel: +65 6327 4045
5 Morgan Stanley Smith Barney $51.7 9.5% 5 Morgan Stanley Smith Barney $34.3 8.8% 2.6% 2.6% 2.8%
2.0%
-0.8% -0.7% 0% 1.7%
60% 6 UBS $50.7 9.4% 6 UBS $32.7 8.3% 60%
7 Bank of America/Merrill Lynch $39.9 7.4% 7 Bank of America/Merrill Lynch $27.6 7.1%
-2.1%
8 SEI Investments $36.2 6.7% 8 SEI Investments $24.6 6.3% -2%
86.3% 9 Commonwealth Financial Network $18.6 3.4% 9 Commonwealth Financial Network $14.3 3.6% -2.3%
40% 0.50% -2.8% -3.1% 40%
10 Genworth $14.8 2.7% 10 Genworth $10.4 2.7% -4% 72.5%
70.3% 68.1% 67.8% 65.8% 66.3% 63.2%
53.4% 50.8% 2009 2Q 2010
44.7% Rank Firm 2009 AUM Rank Firm 2Q 2010 AUM -6% 20%
20% Marketshare Marketshare
1 Fidelity Investments $67.9 13.1% 1 Fidelity Investments $72.5 13.4%
2,5 2,5
0.00% -7.3% -8%
2 Ameriprise Financial $66.9 12.9% 2 Ameriprise Financial $68.9 12.7%
3 LPL Financial
3,4
$59.3 11.4% 3 LPL Financial
3,4
$61.9 11.4% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2Q 2010
0% 0%
TPV Regional Discount Bank IBD Wirehouse 4 Wells Fargo Advisors $44.8 8.6% 4 Wells Fargo Advisors $45.8 8.4% 2006 2007 2008 2009 2Q 2010
Average annual client fee % change
5 UBS $39.4 7.6% 5 UBS $39.5 7.3%
6 Morgan Stanley Smith Barney $37.1 7.2% 6 Edward Jones $36.3 6.7% Wirehouse Regional IBD TPV Bank Discount
Discretionary assets Nondiscretionary assets
7 Bank of America/Merrill Lynch $31.7 6.1% 7 Morgan Stanley Smith Barney $34.6 6.4% The average annual discretionary advisory fee paid by clients in RPM programs was 1.22% as of 2Q 2010. Average client fees in these programs
8 Edward Jones $26.2 5.1% 8 SEI Investments $28.4 5.2% remained relatively constant since 2004, and have currently risen above the lowest level (achieved in 2009). On an absolute basis, program client fees have
The third-party vendor (TPV) channel has the largest percentage of discretionary relationships, with 86.3%. The wirehouse channel tends toward 9 SEI Investments $26.1 5.0% 9 Bank of America/Merrill Lynch $27.5 5.1% dropped 0.22% since the peak in 2001. Once again, the wirehouses are in the lead in terms of marketshare for a managed account program, as they control nearly three-quarters (63.2%) of
11-15 Betterton Street
nondiscretionary accounts, with 55.3% of their assets in these relationships, but this is a decrease from 62.6% last year. 10 Commonwealth Financial Network $19.5 3.8% 10 Commonwealth Financial Network $20.1 3.7%
UMA program AUM. The bank channel has the second largest marketshare controlling 15.7% and the remaining channels control slightly more than 21%
1
Analyst Note: The RPM program client fees presented represent the aggregate average fee of program clients are paying on an annual basis, incorporating all of UMA program assets—which shows a broadening diversity across channels compared to last year.
Analyst Note: In this context, discretion is used to identify whether the advisor or sponsors have the authority to make changes to the client account without AUM figures are Cerulli estimates
account-size breakpoints and fee-schedule discounts. Fee schedules for RPM programs typically begin at 2.50% of assets and scale downward based on
2
client approval. In the case of separate account programs, all separate account relationships are considered discretionary because the asset manager has discre- Portions of program assets in individual securities counted in rep as advisor
account-size breakpoints. Key Implication: The wirehouse marketshare is driven by three of the four largest UMA programs at Morgan Stanley Smith Barney, Bank of America/Merrill
3
tion to trade their portfolio. However, a separate account program is considered nondiscretionary if the advisor or sponsor must get client approval to change Portions of program assets in individual securities counted in rep as portfolio manager Lynch, and Wells Fargo Advisors. These firms boast the largest advisor headcounts, and costly investments in UMA platforms, so it is unsurprising that they
asset managers or allocation. For the purposes of analysis, separate account consultant programs are no longer broken out between discretionary and nondiscre- 4 Key Implication: When looking at average annual client fees in these programs, it’s important to remember that typically the entire balance of the client fee is control most of the market to date. The bank channel has been invigorated by Chase’s relatively new program.
Includes assets sourced through AXA Advisors and assets from the acquisition of Mutual Service Corporation by LPL Financial; Historical assets for Mutual Service Corporation's Special
tionary. Cerulli analysts believe this will allow a more concise view of discretionary and nondiscretionary trends among other programs. Class program and LPL Financial have been combined to reflect the merg directed to the advisor’s production grid. This is unlike separate account consultant programs, for instance, in which an outside asset manager must be paid first
Cross Reference: Exhibit 6.06
5
Assets represent the acquisition of H&R Block by Ameriprise Financial; Historical assets for H&R Block and Ameriprise Financial have been combined to reflect the merger before a fee is applied to a production grid. Coupled with the highest average account balances of the managed account segments, it’s clear that these programs
Key Implication: All channels provide access to both discretionary and nondiscretionary programs, furthering the point that managed accounts are proliferat-
can be the most lucrative and will remain a core business for many high-end advisors—despite potential economic and fiduciary pitfalls from the sponsor’s per-
ing based on their flexibility. It should be noted that every channel has a greater percentage of discretionary assets than they did one year ago. The preference
spective.
London WC2H 9BP
from program sponsors is clearly for discretionary relationships, demonstrated by the fact that the majority of new programs introduced by sponsors over the Fidelity Investments took spot of the top mutual fund advisory program sponsor, with $72.5 billion in AUM as of 2Q 2010. Even after the consolida-
past couple of years are discretionary in nature. Additionally, the move toward more sophisticated portfolio construction concepts and the use of less traditional tion of firms within the wirehouse channel, none of the combined firms have been able to penetrate the top-three on the leaderboard. Cross Reference: Exhibit 4.08, Exhibit 4.14
investments in managed account programs will necessitate sponsors and advisors to engage in more discretionary relationships.
Cross Reference: Exhibit 3.10 - Part 1, Exhibit 3.11
Cross Reference: Exhibit 1.10
CERULLI QUANTITATIVE UPDATE MANAGED ACCOUNTS 2010 CHAPTER 1 33 110 CHAPTER 4 CERULLI QUANTITATIVE UPDATE MANAGED ACCOUNTS 2010 146 CHAPTER 6 CERULLI QUANTITATIVE UPDATE MANAGED ACCOUNTS 2010
CERULLI QUANTITATIVE UPDATE MANAGED ACCOUNTS 2010 CHAPTER 3 81
Tel: +44 20 7470 8817 Page 33 Page 81 Page 110 Page 146
WWW.CERULLI.COM
table of contents - Overview
INTRODUCTION & METHODOLOGY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
KEY THEMES & PROGNOSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
CHAPTER 1: INTRODUCTION TO MANAGED ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
CHAPTER 2: SEPARATE ACCOUNT CONSULTANT PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
CHAPTER 3: MUTUAL FUND ADVISORY PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
CHAPTER 4: REP-AS-PORTFOLIO-MANAGER PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100
CHAPTER 5: REP-AS-ADVISOR PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .119
CHAPTER 6: UNIFIED MANAGED ACCOUNT (UMA) PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .132
CHAPTER 7: PROGRAM SPONSOR CHANNEL ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .148
CHAPTER 8: SEPARATE ACCOUNT ASSET MANAGERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .181
CHAPTER 9: ADVISOR METRICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .218
CHAPTER 10: MERGERS AND ACQUISITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .227
GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .237
COMPANY INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .244
CERULLI QUANTITATIVE UPDATE MANAGED ACCOUNTS 2010 TABLE OF CONTENTS 5
table of contents - Detailed
CHAPTER 1: INTRODUCTION TO MANAGED ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
ASSETS
Exhibit 1.01. Managed Account Assets and Growth, 1999-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . .23
Exhibit 1.02. Managed Account Industry Net Cash Flow by Program Type, 2008-2Q 2010 . . . . .24
Exhibit 1.03. Managed Account Assets and Projections by Segment, 2009-2014E . . . . . . . . . . . .25
Exhibit 1.04. Managed Account Industry Assets, 2Q 2008-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . .26
Exhibit 1.05. Managed Account Assets by Vehicle, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
Exhibit 1.06. Program Marketshare of Managed Accounts Industry, 2Q 2005 vs. 2Q 2010 . . . . .28
Exhibit 1.07. Managed Accounts and Long-Term Mutual Fund Asset Comparison,
2000-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
Exhibit 1.08. Total Mutual Fund Assets in Managed Accounts, 2005-2Q 2010 . . . . . . . . . . . . . . .30
Exhibit 1.09. Estimated Largest Mutual Fund and ETF Companies in Managed Accounts,
1Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
Exhibit 1.10. Managed Account Industry Assets by Program Classification,
2Q 2008-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
Exhibit 1.11. Managed Account Discretionary vs. Nondiscretionary Assets (Excluding Separate
Accounts) by Channel, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
Exhibit 1.12. Managed Account Average Investment Minimums by Program, 2Q 2010 . . . . . . . .34
PLAYERS
Exhibit 1.13. Top-10 Managed Account Program Sponsors Across All Industry Segments,
2003-2Q 2010 - Part 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
Exhibit 1.13. Top-10 Managed Account Program Sponsors Across All Industry Segments,
2003-2Q 2010 - Part 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
Exhibit 1.14. Top-35 Sponsor Managed Account Segment Assets, 2Q 2010 . . . . . . . . . . . . . . . . .37
CHAPTER 2: SEPARATE ACCOUNT CONSULTANT PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
ASSETS
Exhibit 2.01. Separate Account Consultant Program Assets and Growth, 1994-2Q 2010 . . . . . . .39
Exhibit 2.02. Separate Account Consultant Program Projections, 2010E-2014E . . . . . . . . . . . . . .40
Exhibit 2.03. Subadvisory Separate Account Consultant Program Assets and Growth,
1994-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
Exhibit 2.04. Open Separate Account Consultant Program Assets and Growth,
1994-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
Exhibit 2.05. Separate Account Consultant Program Assets, Subadvisory vs. Open,
2001-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Exhibit 2.06. Separate Account Consultant Program Source of New Assets, 2001-2Q 2010 . . . . .44
Exhibit 2.07. Separate Account Industry Sales, Redemptions and Net Cash Flows,
2006-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
Exhibit 2.08. Separate Account Redemption Rates by Quarter, 1Q 2006-2Q 2010 . . . . . . . . . . . .46
6 TABLE OF CONTENTS CERULLI QUANTITATIVE UPDATE MANAGED ACCOUNTS 2010
PLAYERS
Exhibit 2.09. Top-10 Separate Account Consultant Program Sponsors by Total Separate Account
Assets, 2003-2Q 2010 - Part 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
Exhibit 2.09. Top-10 Separate Account Consultant Program Sponsors by Total Separate Account
Assets, 2003-2Q 2010 - Part 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
Exhibit 2.10. Top-30 Separate Account Consultant Program Sponsors by Total Separate Account
Assets, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
Exhibit 2.11. Top-25 Subadvisory Separate Account Consultant Program Sponsors, 2Q 2010 . . .50
Exhibit 2.12. Top-10 Open Separate Account Consultant Program Sponsors, 2Q 2010 . . . . . . . . .51
PROGRAM
Exhibit 2.13. Estimated Total Separate Account Program Industry Accounts, 2004-2Q 2010 . . . .52
Exhibit 2.14. Estimated Total Subadvisory Separate Account Program Industry Accounts,
2001-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
Exhibit 2.15. Estimated Total Open Separate Account Program Industry Accounts,
2004-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .54
Exhibit 2.16. Separate Account Program Average Account Size, Subadvisory and Open,
2004-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
Exhibit 2.17. Subadvisory Separate Account Consultant Program Average Investment
Minimums, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
Exhibit 2.18. Subadvisory Separate Account Programs: Number of Asset Managers,
2Q 2007 vs. 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
Exhibit 2.19. Subadvisory Separate Account Client Average Relationship Size,
2001-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
Exhibit 2.20. Subadvisory Separate Account Average Annual Client Fees, 2000-2Q 2010 . . . . . .59
Exhibit 2.21. Separate Account Program Client Fee Schedule Examples: Equity/Balanced and
Fixed Income, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
Exhibit 2.22. Share of Separate Accounts Requesting Year-End Tax Treatment, 2Q 2010 . . . . . . .61
Exhibit 2.23. Share of Brokerage Firm Advisors Actively Participating in Separate Account
Programs, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
MULTIPLE-STYLE ACCOUNTS
Exhibit 2.24. Multiple-Style Account Firm Examples, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . .63
Exhibit 2.25. Multiple-Style Account Metrics, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
CHANNEL
Exhibit 2.26. Separate Account Consultant Program Assets by Channel, 1999-2Q 2010 . . . . . . . .65
Exhibit 2.27. Separate Account Consultant Program Subadvisory and Open Assets by
Channel, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
Exhibit 2.28. Separate Account Consultant Program Subadvisory and Open Average Account
Size by Channel, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67
Exhibit 2.29. Average Annual Subadvisory Separate Account Program Fee by
Channel, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68
CERULLI QUANTITATIVE UPDATE MANAGED ACCOUNTS 2010 TABLE OF CONTENTS 7
Exhibit 2.30. Separate Account Program Advisor Economic Breakdown Examples by
Firm, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69
CHAPTER 3: MUTUAL FUND ADVISORY PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
ASSETS
Exhibit 3.01. Mutual Fund Advisory Program Assets and Growth, 1994-2Q 2010 . . . . . . . . . . . .71
Exhibit 3.02. Mutual Fund Advisory Program Projections, 2010E-2014E . . . . . . . . . . . . . . . . . . .72
Exhibit 3.03. Mutual Fund Advisory and Long-Term Mutual Fund Assets and Growth,
2001-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73
Exhibit 3.04. Mutual Fund Advisory Packaging Grid, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . .74
Exhibit 3.05. Mutual Fund Advisory Program Assets by Program Type: Packaged, Hybrid, and
Open, 2000-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .75
Exhibit 3.06. Mutual Fund Advisory Program Assets by Asset Class, 2Q 2010 . . . . . . . . . . . . . . .76
Exhibit 3.07. Mutual Fund Advisory Program Source of New Assets, 2Q 2003-2Q 2010 . . . . . . .77
Exhibit 3.08. Mutual Fund Advisory Redemption Rates, 2001-2Q 2010 . . . . . . . . . . . . . . . . . . . .78
Exhibit 3.09. Mutual Fund Advisory Sales, Redemptions and Net Cash Flows,
2004-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79
PLAYERS
Exhibit 3.10. Top-10 Mutual Fund Advisory Program Sponsors, 2003-2Q 2010 - Part 1 . . . . . . .80
Exhibit 3.10. Top-10 Mutual Fund Advisory Program Sponsors, 2003-2Q 2010 - Part 2 . . . . . . .81
Exhibit 3.11. Top-50 Mutual Fund Advisory Programs, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . .82
PROGRAM
Exhibit 3.12. Estimated Number of Mutual Fund Advisory Program Accounts,
2001-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .83
Exhibit 3.13. Mutual Fund Advisory Program Average Account Size, 2000-2Q 2010 . . . . . . . . . .84
Exhibit 3.14. Mutual Fund Advisory Program Average Account Size, Discretionary vs.
Nondiscretionary, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .85
Exhibit 3.15. Mutual Fund Advisory Program Average vs. ‘All-In’ Client Fees,
2003-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .86
Exhibit 3.16. Mutual Fund Advisory Program Average Annual Client Fees, Discretionary vs.
Nondiscretionary, 2002-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .87
Exhibit 3.17. Mutual Fund Advisory Program Average Expense Ratios for Underlying Mutual
Funds by Fund Type, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .88
Exhibit 3.18. Mutual Fund Advisory Client Fee Schedule Examples, 2Q 2010 . . . . . . . . . . . . . . .89
Exhibit 3.19. Mutual Fund Advisory Program Overview of Mutual Funds Used by Firm
Examples, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .90
Exhibit 3.20. Mutual Fund Advisory Sponsors’ Use of Institutionally Priced Share
Classes, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .91
Exhibit 3.21. Share of Advisors Actively Participating in Mutual Fund Advisory
Programs, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .92
8 TABLE OF CONTENTS CERULLI QUANTITATIVE UPDATE MANAGED ACCOUNTS 2010
Exhibit 3.22. Share of Mutual Fund Advisory Programs Offering Recommended Asset
Allocation Models, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .93
CHANNEL
Exhibit 3.23. Mutual Fund Advisory Program Assets by Channel, 2000-2Q 2010 . . . . . . . . . . . . .94
Exhibit 3.24. Mutual Fund Advisory Program Average Account Size by Channel, 2Q 2010 . . . . .95
Exhibit 3.25. Mutual Fund Advisory Program Average Annual Client Fee by
Channel, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .96
Exhibit 3.26. Mutual Fund Advisory Program Advisor Economic Breakdown Examples by
Firm, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .97
ETF ADVISORY OVERVIEW
Exhibit 3.27. ETF Advisory Assets and Growth, 2007-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . .98
Exhibit 3.28. Top-5 ETF Advisory Programs, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .99
CHAPTER 4: REP-AS-PORTFOLIO-MANAGER PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .100
ASSETS
Exhibit 4.01. Rep-As-Portfolio-Manager Program Assets and Growth, 1994-2Q 2010 . . . . . . . .101
Exhibit 4.02. Rep-As-Portfolio-Manager Program Projections, 2010E-2014E . . . . . . . . . . . . . . .102
Exhibit 4.03. Rep-As-Portfolio-Manager Program Assets by Investment Vehicle,
2003-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103
Exhibit 4.04. Rep-As-Portfolio-Manager Program Sales, Redemptions and Net Cash
Flows, 2008-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104
PLAYERS
Exhibit 4.05. Top-15 Rep-As-Portfolio-Manager Programs, 2Q 2010 . . . . . . . . . . . . . . . . . . . . .105
Exhibit 4.06. Top-10 Rep-As-Portfolio-Manager Program Sponsors, 2003-2Q 2010 - Part 1 . . .106
Exhibit 4.06. Top-10 Rep-As-Portfolio-Manager Program Sponsors, 2003-2Q 2010 - Part 2 . . .107
PROGRAM
Exhibit 4.07. Estimated Number of Rep-As-Portfolio-Manager Program Accounts,
2000-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .108
Exhibit 4.08. Rep-As-Portfolio-Manager Program Average Account Size, 2000-2Q 2010 . . . . .109
Exhibit 4.09. Rep-As-Portfolio-Manager Program Average Annual Client Fees,
2000-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .110
Exhibit 4.10. Share of Programs Offering a Recommended List of Securities/Vehicles in
Rep-As-Portfolio-Manager Programs, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . .111
Exhibit 4.11. Share of Programs Offering Guided Portfolios in Rep-As-Portfolio-Manager
Programs, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .112
Exhibit 4.12. Share of Advisors Actively Participating in Rep-As-Portfolio-Manager Programs,
2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .113
Exhibit 4.13. Rep Criteria Requirements to Participate in Rep-As-Portfolio-Manager Programs,
2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .114
CERULLI QUANTITATIVE UPDATE MANAGED ACCOUNTS 2010 TABLE OF CONTENTS 9
CHANNEL
Exhibit 4.14. Rep-As-Portfolio-Manager Program Advisor Economic Breakdown Examples by
Firm, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .115
Exhibit 4.15. Rep-As-Portfolio-Manager Program Assets by Channel, 2000-2Q 2010 . . . . . . . .116
Exhibit 4.16. Rep-As-Portfolio-Manager Program Average Account Size by Channel,
2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .117
Exhibit 4.17. Rep-As-Portfolio-Manager Program Average Annual Client Fee by Channel,
2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .118
CHAPTER 5: REP-AS-ADVISOR PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .119
ASSETS
Exhibit 5.01. Rep-As-Advisor Program Assets and Growth, 1998-2Q 2010 . . . . . . . . . . . . . . . .120
Exhibit 5.02. Rep-As-Advisor Program Projections, 2010E-2014E . . . . . . . . . . . . . . . . . . . . . . .121
Exhibit 5.03. Rep-As-Advisor Program Assets by Product Type, 2Q 2010 . . . . . . . . . . . . . . . . .122
Exhibit 5.04. Rep-As-Advisor Program Sales, Redemptions and Net Cash Flows,
2008-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .123
PLAYERS
Exhibit 5.05. Top-15 Rep-As-Advisor Programs, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .124
Exhibit 5.06. Top-10 Rep-As-Advisor Program Sponsors, 2007-2Q 2010 . . . . . . . . . . . . . . . . . .125
PROGRAM
Exhibit 5.07. Estimated Number of Rep-As-Advisor Program Accounts, 2005-2Q 2010 . . . . . .126
Exhibit 5.08. Rep-As-Advisor Program Average Account Size, 2005-2Q 2010 . . . . . . . . . . . . . .127
Exhibit 5.09. Share of Advisors Actively Participating in Rep-As-Advisor Programs,
2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .128
Exhibit 5.10. Rep-As-Advisor Program Average Annual Client Fees, 2006-2Q 2010 . . . . . . . . .129
CHANNEL
Exhibit 5.11. Rep-As-Advisor Program Assets by Channel, 2000-2Q 2010 . . . . . . . . . . . . . . . . .130
Exhibit 5.12. Rep-As-Advisor Program Average Account Size by Channel, 2Q 2010 . . . . . . . . .131
CHAPTER 6: UNIFIED MANAGED ACCOUNT (UMA) PROGRAMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .132
ASSETS
Exhibit 6.01. Unified Managed Account Program Assets and Growth, 2005-2Q 2010 . . . . . . . .133
Exhibit 6.02. Unified Managed Account Program Assets and Projections, 2010E-2014E . . . . . .134
Exhibit 6.03. Unified Managed Account Program Sales, Redemptions and Net Cash Flows,
2008-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135
Exhibit 6.04. UMA Assets by Investment Vehicle, 2005-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . .136
Exhibit 6.05. UMA Investment Vehicle Use by Channel, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . .137
PLAYERS
Exhibit 6.06. Top-15 Unified Managed Account Programs, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . .138
10 TABLE OF CONTENTS CERULLI QUANTITATIVE UPDATE MANAGED ACCOUNTS 2010
PROGRAM
Exhibit 6.07. Unified Managed Account Packaging, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . .139
Exhibit 6.08. Estimated Number of UMA Program Accounts, 2006-2Q 2010 . . . . . . . . . . . . . . .140
Exhibit 6.09. UMA Program Average Account Size, 2005-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . .141
Exhibit 6.10. UMA Program Average Annual Client Fee Versus Average Annual ‘All-In’
Client Fee by Channel, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .142
Exhibit 6.11. UMA Program Source of New Assets, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . .143
Exhibit 6.12. UMA Program Source of New Assets by Client Type, 2Q 2010 . . . . . . . . . . . . . . .144
Exhibit 6.13. Share of Advisors Actively Participating in UMA Programs, 2Q 2010 . . . . . . . . . .145
CHANNEL
Exhibit 6.14. UMA Assets by Channel, 2006-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .146
Exhibit 6.15. UMA Average Account Size by Channel, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . .147
CHAPTER 7: PROGRAM SPONSOR CHANNEL ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .148
HEADCOUNT
Exhibit 7.01. Number and Percentage of Advisors by Channel, 2009 . . . . . . . . . . . . . . . . . . . . . .149
Exhibit 7.02. Historical Change in Total Advisors by Channel, 2004-2009 . . . . . . . . . . . . . . . . .150
CHANNEL OVERVIEW
Exhibit 7.03. Managed Account Assets by Distribution Channel, 2000-2Q 2010 . . . . . . . . . . . . .151
Exhibit 7.04. Total Managed Account Assets by Channel Scorecard, 1999-2Q 2010 . . . . . . . . . .152
Exhibit 7.05. Estimated Number of Accounts by Channel, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . .153
Exhibit 7.06. Managed Account Channel Demographics, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . .154
Exhibit 7.07. Managed Account Channel Assessment and Outlook . . . . . . . . . . . . . . . . . . . . . . .155
WIREHOUSES
Exhibit 7.08. Wirehouse Mix of Managed Account Assets by Program Type, 2000-2Q 2010 . . .156
Exhibit 7.09. Wirehouse Channel Managed Account Scorecard, 1999-2Q 2010 . . . . . . . . . . . . .157
Exhibit 7.10. Top Wirehouse Sponsors by Managed Account Assets, 2Q 2010 . . . . . . . . . . . . . .158
Exhibit 7.11. Wirehouse Average Account Size Across Program Types, 2Q 2010 . . . . . . . . . . . .159
Exhibit 7.12. Wirehouse Broker/Dealers by Advisor Headcount and Client Assets, 2009 . . . . . .160
INDEPENDENTS
Exhibit 7.13. Independent Broker/Dealer Mix of Managed Account Assets by Program
Type, 2000-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .161
Exhibit 7.14. Independent Broker/Dealer Channel Managed Account Scorecard,
1999-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .162
Exhibit 7.15. Top-10 Independent Broker/Dealer Sponsors by Managed Account Assets,
2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .163
Exhibit 7.16. Independent Broker/Dealer Channel Average Account Size Across Program
Types, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .164
REGIONALS
Exhibit 7.17. Regional Channel Mix of Managed Account Assets by Program Type,
2000-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .165
CERULLI QUANTITATIVE UPDATE MANAGED ACCOUNTS 2010 TABLE OF CONTENTS 11
Exhibit 7.18. Regional Channel Managed Account Scorecard, 1999-2Q 2010 . . . . . . . . . . . . . . .166
Exhibit 7.19. Top-10 Regional Sponsors by Managed Account Assets, 2Q 2010 . . . . . . . . . . . . .167
Exhibit 7.20. Regional Channel Average Account Size Across Program Types, 2Q 2010 . . . . . .168
DISCOUNT BROKERAGE
Exhibit 7.21. Discount Channel Mix of Managed Account Assets by Program Type,
2000-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .169
Exhibit 7.22. Discount Channel Managed Account Scorecard, 1999-2Q 2010 . . . . . . . . . . . . . . .170
Exhibit 7.23. Top Discount Sponsors by Managed Account Assets, 2Q 2010 . . . . . . . . . . . . . . .171
BANKS
Exhibit 7.24. Bank Channel Mix of Managed Account Assets by Program Type,
2000-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .172
Exhibit 7.25. Bank Channel Managed Account Scorecard, 1999-2Q 2010 . . . . . . . . . . . . . . . . . .173
Exhibit 7.26. Top Bank Sponsors by Managed Account Assets, 2Q 2010 . . . . . . . . . . . . . . . . . .174
Exhibit 7.27. Bank Channel Average Account Size Across Program Types, 2Q 2010 . . . . . . . . .175
THIRD-PARTY VENDORS
Exhibit 7.28. Third-Party Vendor Mix of Managed Account Assets by Program Type,
2000-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .176
Exhibit 7.29. Third-Party Vendor Managed Account Scorecard, 1999-2Q 2010 . . . . . . . . . . . . .177
Exhibit 7.30. Top Nonadvisory Third-Party Managed Account Service Providers, 2Q 2010 . . . .178
Exhibit 7.31. Top Advisory Third-Party Managed Account Providers, 2Q 2010 . . . . . . . . . . . . .179
Exhibit 7.32. Third-Party Vendor Channel Average Account Size Across Program Types,
2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .180
CHAPTER 8: SEPARATE ACCOUNT ASSET MANAGERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .181
ASSETS
Exhibit 8.01. Asset Manager Firm AUM Breakdown, 2005-2Q 2010 . . . . . . . . . . . . . . . . . . . . . .182
Exhibit 8.02. Separate Account Asset Manager Assets with Tax-Advantaged
Accounts, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .183
PLAYERS
Exhibit 8.03. Top-100 Separate Account Program Asset Managers, 2Q 2010 - Part 1 . . . . . . . . .184
Exhibit 8.03. Top-100 Separate Account Program Asset Managers, 2Q 2010 - Part 2 . . . . . . . . .185
Exhibit 8.04. Top-10 Separate Account Program Asset Managers, 2003-2Q 2010 - Part 1 . . . . .186
Exhibit 8.04. Top-10 Separate Account Program Asset Managers, 2003-2Q 2010 - Part 2 . . . . .187
Exhibit 8.05. Top-10 Separate Account Asset Manager Multiaffiliate Holding Companies,
2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .188
Exhibit 8.06. Top-15 Separate Account Consultant Program Asset Management Groups,
2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .189
Exhibit 8.07. Largest Growth and Core Managers, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .190
Exhibit 8.08. Largest Value, Global, and International Managers, 2Q 2010 . . . . . . . . . . . . . . . . .191
Exhibit 8.09. Largest Fixed-Income, Balanced, and Other Managers, 2Q 2010 . . . . . . . . . . . . . .192
12 TABLE OF CONTENTS CERULLI QUANTITATIVE UPDATE MANAGED ACCOUNTS 2010
Exhibit 8.10. Top Proprietary Separate Account Asset Managers, 2Q 2010 . . . . . . . . . . . . . . . . .193
Exhibit 8.11. Highest Asset Manager Consultant Program Asset Growth Rates,
2Q 2004-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .194
Exhibit 8.12. Separate Account Asset Managers: Segmentation by Total Firm AUM,
2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .195
Exhibit 8.13. Separate Account Asset Managers: Segmentation by Total Separate Account AUM,
2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .196
INVESTMENT STYLE ANALYSIS
Exhibit 8.14. Separate Account Program Asset Allocation Shift, 2001-2Q 2010 . . . . . . . . . . . . .197
Exhibit 8.15. Separate Account Manager Segmentation by Number of Styles Offered,
2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .198
Exhibit 8.16. Multiple-Style Account Investment Minimums, 2Q 2010 . . . . . . . . . . . . . . . . . . . .199
Exhibit 8.17. Multiple-Style Account Distribution Segmentation by Number of Sponsor
Platforms, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .200
MODEL SUBMISSION AND FEE ANALYSIS
Exhibit 8.18. Percentage of Asset Managers Submitting Models to Program Sponsor/Overlay
Managers, 2006-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .201
Exhibit 8.19. Summary of Asset Managers That Do and Do Not Submit Models, 2Q 2010 . . . .202
Exhibit 8.20. Asset Manager Reported Range and Asset-Weighted Average Management
Fees, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .203
Exhibit 8.21. Asset Manager Reported Average Management Fees, Subadvisory and Open
Programs, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .204
MODEL METRICS
Exhibit 8.22. Top-15 Model Portfolio Managers, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .205
Exhibit 8.23. Top-15 Model Portfolio Strategies, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .206
Exhibit 8.24. Model Portfolio Asset Allocation, 1Q 2009-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . .207
SPONSOR PERSPECTIVES AND RELATIONSHIPS
Exhibit 8.25. Sponsor Acceptance of Managers Trading Away, 2Q 2010 . . . . . . . . . . . . . . . . . . .208
Exhibit 8.26. Responsibility for Monitoring/Testing Best Execution, 2Q 2010 . . . . . . . . . . . . . .209
Exhibit 8.27. Manager Segmentation by Number of Program Sponsor Relationships,
2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .210
Exhibit 8.28. Average Asset Concentration Among Top-Five Sponsors by Separate Account
AUM, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .211
Exhibit 8.29. Broker/Dealer Separate Account Consultant Program Relationships, 2Q 2010 . . .212
OPERATIONS
Exhibit 8.30. Separate Account Consultant Program Asset Manager Headcount: Sales and
Marketing, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .213
Exhibit 8.31. Separate Account Consultant Program Asset Manager Headcount: Operations,
2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .214
Exhibit 8.32. Separate Account Consultant Program Asset Manager Average Headcount by
AUM, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .215
CERULLI QUANTITATIVE UPDATE MANAGED ACCOUNTS 2010 TABLE OF CONTENTS 13
Exhibit 8.33. Separate Account Asset Manager Portfolio Accounting System by
Firm, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .216
Exhibit 8.34. Separate Account Asset Manager Portfolio Accounting System by
AUM, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .217
CHAPTER 9: ADVISOR METRICS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .218
Exhibit 9.01. Destination of Advisor Leaving a Firm. 2004-2009 . . . . . . . . . . . . . . . . . . . . . . . . .219
Exhibit 9.02. Importance of Managed Account Platform Attributes for Advisors Seeking to
Change Broker/Dealers, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .220
Exhibit 9.03. Percentage of Advisor Assets Held in Managed Accounts, 2Q 2008-2Q 2010 . . . .221
Exhibit 9.04. Advisor Opinion of Managed Account Types, 2Q 2010 . . . . . . . . . . . . . . . . . . . . .222
Exhibit 9.05. Advisor Access and Use of UMAs by Channel, 2Q 2010 . . . . . . . . . . . . . . . . . . . .223
Exhibit 9.06. Advisor Perception of Unified Managed Accounts, by Use, 2Q 2010 . . . . . . . . . .224
Exhibit 9.07. Advisor Opinion of Managed Account Programs that Offer Optional Insurance
Wrappers, 2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .225
Exhibit 9.08. Advisors’ Preferred Methods to Learn About New Managed Account Programs,
2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .226
CHAPTER 10: MERGERS AND ACQUISITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .227
Exhibit 10.01. History of Managed Account M&A Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . .228
Exhibit 10.02. Top-10 Separate Account Consultant Program Sponsors by Total Separate Account
Assets, 2003-2Q 2010 - Part 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .229
Exhibit 10.02. Top-10 Separate Account Consultant Program Sponsors by Total Separate Account
Assets, 2003-2Q 2010 - Part 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .230
Exhibit 10.03. Top-10 Mutual Fund Advisory Program Sponsors, 2003-2Q 2010 - Part 1 . . . . .231
Exhibit 10.03. Top-10 Mutual Fund Advisory Program Sponsors, 2003-2Q 2010 - Part 2 . . . . .232
Exhibit 10.04. Top-10 Rep-As-Portfolio-Manager Program Sponsors, 2003-2Q 2010 - Part 1 . .233
Exhibit 10.04. Top-10 Rep-As-Portfolio-Manager Program Sponsors, 2003-2Q 2010 - Part 2 . .234
Exhibit 10.05. Top-10 Rep-As-Advisor Program Sponsors, 2007-2Q 2010 . . . . . . . . . . . . . . . . .235
Exhibit 10.06. Top-10 UMA Program Sponsors, 2007-2Q 2010 . . . . . . . . . . . . . . . . . . . . . . . . . .236
GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .237
COMPANY INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .244
14 TABLE OF CONTENTS CERULLI QUANTITATIVE UPDATE MANAGED ACCOUNTS 2010
Introduction and Methodology
Cerulli Quantitative Update: Managed Accounts 2010 is the result of ongoing research and analysis of
the managed account marketplace by Cerulli Associates (CA). The fee-based managed account market-
place has been a core research focus within CA since the firm’s inception in the early 1990s. Cerulli
Associates has previously released 20 in-depth studies in The Cerulli ReportTM series that tracked the
development and growth of the managed account market. In addition to reports, CA provides the indus-
try its perspective through The Cerulli EdgeTM—Managed Accounts Edition, our quarterly publication
updating our most current quantitative and qualitative industry research.
CA analysts’ opinions and perspectives are derived from our ongoing research, which is shaped by a
methodology based on three components: (1) Industry understanding: All CA analysts come to the
firm with a background shaped by relevant experience at leading financial services firms, which con-
tributes to the internal pool of industry knowledge that is fed by this experience; (2) Quantitative
analysis: CA independently maintains surveys tracking business metrics from nearly 200 managed
account industry participants (asset managers and sponsors combined) on a quarterly basis, representing
the industry’s only comprehensive source of sizing, participant ranking, and other competitive analysis.
CA adds information from third-party databases and public company reports to complement analysis
from our proprietary database; (3) Qualitative research: CA analysts conduct background research
interviews with hundreds of industry executives annually in a confidential format allowing for open dia-
logue about the current state and future outlook for the industry. This last research method provides a
means of synthesizing the other components of our methodology into research products that are inde-
pendent, insightful, and firmly grounded in the industry’s current climate.
Specific to Quantitative Update: Managed Accounts 2010, the data comes from our proprietary data-
base, with most data points updated with 2Q 2010 survey findings. The managed account survey effort
tracks data from the early 1990s to present. Currently, CA maintains an online password-protected sur-
vey engine that reaches out each quarter to more than 50 managed account program sponsors and more
than 120 asset managers offering separate accounts on brokerage consultant programs. This report also
incorporates survey findings from the intermediary practice within CA. Firms participate in data collec-
tion as part of a voluntary information-sharing relationship, completing the survey in exchange for an
aggregate summary of key findings and market sizing information. As reflected in this report, all firms’
competitive information is presented in industry aggregate or in nonspecific form, as proprietary survey
information is never directly attributed to participants. For more information about our survey process
for the managed accounts industry, please contact CA or see our survey website at
www.cerullisurveys.com.
In addition to survey data, CA analysts compiled information available through third parties, such as
eVestment Alliance, as well as publicly traded firms’ financial filings, to enhance the analysis contained
in this publication.
CERULLI QUANTITATIVE UPDATE MANAGED ACCOUNTS 2010 METHODOLOGY 15
SAMPLE SECTION
from
CERULLI QUANTITATIVE UPDATE:
MANAGED ACCOUNTS 2010
EXHIBIT 1.06
Program Marketshare of Managed Accounts Industry, 2Q 2005 vs. 2Q 2010
Source: Cerulli Associates
2Q 2005 2Q 2010
Unified managed accounts
Fee-based brokerage 4.3%
18.9%
Rep as advisor, Separate account
Rep as advisor consultant
3.8% 20.4%
28.8%
Rep as portfolio
manager
9.2%
Separate account
consultant Rep as portfolio
Mutual fund 48.0% manager
advisory 16.9%
20.1%
ETF advisory Mutual fund advisory
0.4% 29.2%
Rep-as advisor and rep-as-portfolio-manager programs collectively accounted for more than 37% of the managed account marketplace in 2Q
2010, which is slightly higher than in 2Q 2009. Separate account programs lost the position as the largest managed account program type for the first time,
as mutual fund advisory programs now compose 29.2% of the industry, versus the 28.8% marketshare of separate account consultant programs.
Key Implication: This marketshare pie continues to grow more diverse and more balanced as different advice delivery channels find success in varying pro-
gram types. The rep-driven programs have seen significant increases in marketshare due in part to the dissolution of fee-based brokerage accounts, but also to
the volatility in the markets during the last two years, as advisors began to view these programs as a way to more easily move clients to more conservative
investments and cash, and to flexibly manage their clients portfolio in the short term. Cerulli analysts expect that once the market stabilizes, advisors may move
clients back into other programs. Additionally, Cerulli analysts expect to see declining marketshare for separate account consultant programs in the future as
UMA programs continue to evolve and compete directly for assets.
Cross Reference: Exhibit 1.01, Exhibit 1.04
28 CHAPTER 1 CERULLI QUANTITATIVE UPDATE MANAGED ACCOUNTS 2010
EXHIBIT 5.08
Rep-As-Advisor Program Average Account Size, 2005-2Q 2010
Source: Cerulli Associates
$350,000 $331,023 40%
27.7% $295,203
$300,000 $277,309 $286,249 $275,983
$251,970 19.4%
20%
$250,000
$224,190
3.1%
$200,000 10.1%
-6.5% 0%
$150,000
$100,000
-20%
$50,000
-32.3%
$0 -40%
2005 2006 2007 2008 2009 1Q 2010 2Q 2010
Average account size Growth rate
The average rep-as-advisor program account value was $275,983 as of 2Q 2010. This represents a 3.6% overall decrease since year-end 2009, and a
16.6% decline from the average account size peak in 2007.
Analyst Note: The industry aggregate account values are calculated using a simple average method, dividing total assets by total number of individual
accounts.
Key Implication: Although notable in size, rep-as-advisor program account values are reported to be the second lowest—larger than only mutual fund adviso-
ry programs. 2008’s market turmoil led to a sharp decline in average account sizes across all managed account programs, with rep-as-advisor accounts losing
32.3%. But as the markets stabilized in 2009, average account sizes have rebounded. Long term, average account sizes in these programs should hover around
the $275,000 to $300,000 mark as this asset figure appears to be the point at which most advisors will begin to transition their clients to UMA programs.
Cross Reference: Exhibit 5.01 (Key Implication)
CERULLI QUANTITATIVE UPDATE MANAGED ACCOUNTS 2010 CHAPTER 5 127
Related docs
Other docs by xlh94473
