Asked what they would do with an extra $100,000 to invest in their business, 62% of broker/dealers would invest it in automation and integration, SEI found in a survey of 25 B/Ds who attended an SEI conference on business strategies.

Sixty-seven percent said that they were more open to giving advice through fee-based programs than to relying on commissionable, commoditized products. For mutual fund companies, this means the increasing importance of advice to broker/dealers and their clients will make B/Ds “increasingly important to advisors,” said Chris Arizin, managing director of the national accounts team at SEI.

A majority also said they are assuming more fiduciary responsibilities and that increased regulatory scrutiny has significantly affected their businesses. As a result of greater regulatory scrutiny, many B/Ds are working with fewer product providers.

As to what the industry will look like in 2010, they said there will be more mergers and acquisitions, resulting in fewer and larger brokerages. And financial planners and advisers, grappling with increased compliance complexity, will form stronger relationships with broker/dealers, they predicted.

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