The report delves into how large firms dominate the US broker-dealer sector, highlighting some of the main numbers.

The top 25 broker-dealer wealth managers in the US account for more than two-thirds (68 per cent) of total sector assets under management, highlighting how the consolidation trend of recent years is panning out.

Figures from Cerulli Associates, the Boston-based research and analytics firm, said that wirehouses made up four of the largest broker-dealers.

Advisors at the top-five B/D firms manage, on average, $159 million in AuM - 81 per cent higher than the average advisor in the industry, the report said. The study is called US Broker/Dealer Marketplace 2021: The Pursuit of Scale.

“The increased scale of firms in the marketplace continues to benefit many advisors, as firms are able to make more significant investments in the technology and support services that are so critical to advisor productivity and a high-quality client experience,” Michael Rose, associate director at Cerulli, said. “As the industry increasingly moves toward a fee-based model, B/Ds that can attract and retain established advisors through the supremacy of their platforms and service offerings while developing the next generation of talent will be best positioned for growth."

The biggest broker-dealers in the US by assets under management are Fidelity Investments, Charles Schwab, Wells Fargo Advisors, Edward Jones, and TD Ameritrade (source: Investopedia).

While mergers and acquisitions have driven up the share of industry assets and advisor affiliations controlled by the largest B/Ds, the number of registered wealth-management-oriented B/Ds has declined from 1,284 in 2010 to 923 in 2020, the report said.

This shift stems from a restrictive regulatory environment for B/D operations, the increasing cost of maintaining the necessary technology infrastructure to operate a B/D, and a recognition by firms of the change in their business focus away from brokerage-based business toward advisory services.