Market Volatility Continues

In the 3Q 2011 advisory solutions assets contracted by $177b. Assets in advisory solutions declined from  $2.3 trillion to $2.1 trillion. The reduction was largely driven by poor equity market performance. The S&P 500 and the Russell 3000 posted negative numbers for the quarter returning –13.9% and –15.3%. For the S&P 500, it was the worst quarter since 2008. Advisory Solutions were slightly more resilient declining only 7.5% as compared to broader indices.

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During 3Q 2011 advisory assets contracted by $177 billion or 7.5%. As a result, the managed solutions asset base shrunk from $2.3 trillion to $2.1 trillion. The decline in advisory assets was largely driven by poor equity market performance as the S&P 500 and the Russell 3000 turned negative for the quarter, returning -13.9% and -15.3%. In fact, the S&P 500 returned the worst three-month period since the start of the financial crisis in 2008.

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Advisory Solutions see Net New Sales of $60.3 billion
During 2Q 2011 advisory assets grew slightly by $71 billion or 3.1%. This compares to a market return of 0.1% – according to the S&P 500. The UMA market segment grew the fastest at 7.7% to reach $139 billion in assets under management. Other segments increased consistently with the overall industry. The SMA market grew 2.0%, beating the overall market growth rate.

MS Assets Reach $2.3 Trillion

During 1Q 2011 advisory assets increased $162 billion to $2.3 trillion representing a quarterly growth rate of 7.6%. In comparison, the S&P 500 was up 5.9% for the quarter and the Russell 3000 returned 6.4% for the same period. UMA advisory and rep as portfolio manager programs had the highest growth rates. UMA assets were up 10.8% (when adjusted for restatements) to $128 billion and RPM assets increased by 11.8% driving assets to exceed the $400 billion mark.

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During 1Q 2011 advisory assets increased $162 billion to $2.3 trillion representing a quarterly growth rate of 7.6%. In comparison, the S&P 500 was up 5.9% for the quarter and the Russell 3000 returned 6.4% for the same period. Market indices are simply used as relative benchmarks against which to compare industry growth rates. According to reported sales figures, the advisory industry took in $81 billion in net new sales which represents 50% of the growth for the quarter. See Exhibit 6 within PDF. Rep as portfolio manager and mutual fund advisory programs saw the most significant inflows with $24.5 and $20.9 billion respectively.

2010 saw Advisory Solutions assets under management top two trillion dollars, finishing the year that began with AUM of $1.8T.  Assets grew at more than 26% beating the S&P 500 which grew at just over 15%.  A stronger economic climate and government initiatives helped US equities beat broader international indices.

The fourth quarter growth in Advisory Solutions of 9.3% was fueled by UMA and the rep-driven programs Rep as Advisor and Rep as Portfolio Manager.  MMI Central 2010 Year End Early Edition is available by clicking below. A final version will be available soon.

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