Some pundits say that registered investment advisors are becoming a portfolio manager, more than an advisor.

Today, broker-dealers and wirehouses are allowing their advisors to have full discretion to invest client assets in stocks, bonds, mutual funds and exchange-traded funds.

Broker-dealers and wirehouses provide training and minimum requirements on experience and time with the firm for reps who want to actually place orders on behalf of their clients.

As of the end of June, reps managed $456 billion in more than 1.2 million individual accounts, up from $403 billion and 1 million accounts at the start of the year, according to the latest data from the Money Management Institute.

Morgan Stanley Wealth Management vice chairman Paul Hatch has said publicly that these reps-as-portfolio-manager programs are "a permanent change."

In this new world, Morgan Stanley's reps as PMs account for 33% of the market, investing more than $150 billion. Next is Bank of America Merrill Lynch with $106 billion and a 23% share of the market. Then come UBS Financial Services ($62 billion under management by reps, a 14% market share) and Wells Fargo & Co. ($49 billion and a 11% market share), according to MMI.

Hatch is ambivalent. On the one hand, he sees advisors better serving clients, because they don't make commissions on the orders they place. They make changes to holdings for flat annual fees.

"The closer the portfolio manager is to the client, the more likely the solution is going to be tied to the client's goals," he is reported to have said.

On the other hand, this is new, challenging ground for advisors. "The biggest challenge the industry faces today is asset allocation; advisors need to be qualified to do this,'' Hatch said. "There might be only 10% of advisors that are qualified to do [stock selection] today, and that's not where it needs to be."

Therein lies the problem. In an interview with Money Management Executive, Neil Bathon, founder of FUSE Research Network, said: "How can an advisor offer superior financial advice and guidance and also be top notch in manager selection, manager monitoring, asset allocation and portfolio construction? The skills required of a rep to be good at all the different pieces that go into being a good portfolio manager are simply not things that they have been educated on."

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