Rumors of the demise of wirehouses in the US wealth management market have been greatly exaggerated. Cerulli Associates has provided a new snapshot of their market share.

The research firm that predicted recently that marketshare gains registered investment advisors and dually-registered channels will hit wirehouses says that the latter models still dominate traditional advisory distribution. They control 42 per cent of the market, according to Cerulli Associates.

"Wirehouse advisors make up just 16 per cent of overall headcount, but control more than 42 per cent of all traditionally advised assets," Kenton Shirk, associate director at Cerulli, said.

The firm does expect some slippage in wirehouse market share in the near term, it said.

"The wirehouse channel offers both the greatest opportunity and the greatest challenges for product providers. As they constitute the lion's share of advisor-directed assets, these firms are a strategic priority for nearly every asset management firm,” Shirk said.

Having recognized their position, wirehouses have sought to maximize the revenue they receive from the product providers through revenue sharing, preferred partnership programs, and a variety of other sponsorship opportunities, the firm said in a note.

"While this has reduced the profitability of wirehouse relationships for asset managers, the pure scale of the opportunity at the wirehouse firms has kept providers from abandoning their distribution efforts," Shirk continued.

Though Cerulli expects modest reductions in wirehouse marketshare in the near term, the channel will remain the premier distribution opportunity for product providers, and, therefore, a central element of their strategic distribution plans, it said.

Last year the research firm estimated that the number of advisors in the wirehouse channel will decline from 47,843 at the end of 2014 to 45,580 by end-2016, painting a somewhat brighter picture for the RIA channel (including dually-registered): that headcount will rise from 54,722 to 60,010.