Phill Rogerson, Senior Vice President, Head of the RIA Channel for AssetMark, joined Julie Cooling, Founder and CEO of RIA Channel, to discuss how smaller advisory firms are being squeezed by rising client expectations while the industry continues to consolidate.
Rogerson notes that the RIA industry may be facing its most rapid and significant changes ever, as well-capitalized players continue to consolidate the space. Aggregators operate at scale and are run by professional management teams. Another trend is that individual investors are seeking broader, deeper advice. This combination can squeeze out smaller advisors, as aggregators have the scale to invest in specialist teams to provide the advice investors are looking for.
The AssetMark platform serves 13,000 advisors and 300,000 households, providing the scale and capabilities advisors can benefit from. AssetMark has been known as the preeminent provider for advisors desiring to outsource their entire operating platform. Because many advisors don’t want to change out their entire operating system, AssetMark now offers its platform services on a modular basis. This allows advisors to replace one component of their operating platform at a time. Because advisors are being asked to expand their service offerings, they have not yet experienced the fee compression that has impacted many other areas of the industry.
It is now imperative to include private markets in investor portfolios. Over 90% of firms with over $100 million are privately held, while the number of publicly traded companies has declined by 50%. It is difficult for investors to access innovation in small-cap companies without exposure to the private markets. The AssetMark platform now supports private equity, private credit, and private real estate investments, including manager research and the ability to trade and rebalance during liquidity windows for those products. The impediments to advisors adopting private assets have focused on researching fund offerings and on operational challenges.
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