Life Health Annuities Variable Annuities

Sub-Advisory Market Is Robust, FRC Data Show

April 08, 2011 at 05:39 AM
Share & Print

The subâ€advisory market last year rebounded to levels seen before the onset of financial crisis in 2008, achieving an all-time high of $1.7 trillion in assets, according to a statement issued Wednesday by Financial Research Corporation (FRC).

Lynette DeWitt, the firm's director of subâ€advisory research, presented the findings on Wednesday at the Financial Research Associates 11th Annual Subâ€Advised Funds Forum in Boston, the statement said

"Subâ€advised products now represent 13.4% of the industry for mutual funds, and 42% for variable annuities," DeWitt said at the forum. "These figures are up from 12.9% for mutual funds and 40% for variable annuities at yearâ€end 2009. In fact, market growth has been so strong that later this year we will be revising our 2015 forecast upward."

DeWitt also said that a record high of some $120 billion in mandate changes occurred in 2010, with nearly two-third of that activity coming in the mutual fund space. Now, she said, "we see sponsor firms giving subâ€advisor changes of the last year time to settle in, and foresee the level of manager changes moderating in 2011."

FRC maintains a 10â€year history of mutual fund and variable annuity subâ€advisory asset growth, according to the statement.

In her comments, DeWitt discussed several of the key trends in the industry over the past decade.

  • A 10% compounded annual growth rate in mutual fund assets
  • An 11% compounded annual growth rate in variable annuities
  • Greatest growth rate in sub-advised mutual fund assets led by corporate bond funds, international bond funds and international equities.

Looking ahead, DeWitt said: "We see the subâ€advisory market for the remainder of 2011 being a competitive environment, with performance pressure escalation, and broader market challenges. Toward the broader horizon, our view is of a market that will continue to grow along historic patterns, with relatively greater increases on the way for subâ€advised variable annuities."

Variable Annuities
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Related Stories

How In-Plan Annuity Sales Could Help Retail Advisors 5 Trends in Today's Annuity Market: Equitable Ameriprise Posts 45% Jump in Variable Annuity Sales Brighthouse Asks Court for Help With Annuity Tied to Murder Case 12 States With Biggest Estate Tax Bills How to Explain RILAs Better

Resource Center

Why Charitable Expertise Should Be Part of Your Practice link

White Paper

Why Charitable Expertise Should Be Part of Your Practice

Generative AI Trends Among U.S. Financial Advisors and Consumers link

White Paper

Generative AI Trends Among U.S. Financial Advisors and Consumers

Tech Is the New Talent Magnet: Firms That Invest in Innovation Attract Top Advisors link

White Paper

Tech Is the New Talent Magnet: Firms That Invest in Innovation Attract Top Advisors