Fee-Only RIAs Losing Market Share to Hybrid Wealth Firms
Though the number of large fee-only RIAs has increased over the past five years, their growth rate has lagged behind that of hybrid RIAs with brokerage businesses and RIAs with insurance capabilities, according to a new report from Cerulli Associates.
In the $5 billion-plus RIA market, Cerulli also found that the asset market share of true fee-only independent RIAs declined between 2020 and 2025, from 42% to 34%.
The data is included in Cerulli’s white paper, “Fee-Only, Fiduciary, and the Changing Landscape of Independent Advice,” where the firm warned that the “shrinking footprint” could make it “more challenging for clients to find a firm held exclusively to a fiduciary standard.”
Earlier this year, Credent Wealth Management commissioned Cerulli to conduct a study on the independent RIA landscape. According to Cerulli, research included interviews with nearly two dozen wealth management executives, as well as market sizing “of true fee-only independent RIA firms that do not have an affiliated broker/dealer or licenses to sell insurance products.”
Cerulli gauged true fee-only independent RIAs against independent RIAs employing advisors who maintain state insurance licenses, allowing the firms to offer and sell fixed annuities, life insurance and, in certain cases, fee-based variable annuity contracts, as well as RIAs that maintain a b/d affiliation to sell commission-based products.
According to Cerulli, the total number of $5 billion-plus RIAs jumped from 194 to 343 in the past five years. Hybrid RIAs with brokerage business climbed from 104 to 186, while independent RIAs with insurance capabilities climbed to 36 from seven; the compound growth rates were 12.4% and 37.3%, respectively. Fee-only RIAs on that level climbed from 83 to 121, at a 7.8% rate.
As mentioned, fee-only RIAs asset market share dropped 7.4 percentage points in the past five years, while RIAs with insurance climbed from 7% to 14%, and hybrid RIAs with brokerage business remained steady at 51%.
According to Brendan Powers, a senior director with Cerulli and head of Product Development and Institutional practices, true fee-only RIAs are a larger share of smaller RIAs below the $5 billion threshold, but noted the trend line wouldn’t change if expanded beyond that segment.
“Because of how much market share the larger hybrids and independent with insurance licenses occupy, they are still growing at a faster pace and occupying more market share,” Powers said.
The increase in RIAs mirrors a demand for advice, with 69% of affluent investors in 2025 saying they are willing to pay for financial advice, up from 35% in 2009. Currently, about 33% reported paying a percentage fee based on assets, while 22% pay commissions, 10% pay a retainer or flat hourly fee, and 15% said they were unsure who their provider was compensated for advice.
“While that percentage is almost certainly lower than it was a decade ago, the layers of fees paid for financial advice, investment management products, and other services remain a challenge for even the most informed clients to assess,” the white paper read.
Cerulli also found that fiduciary protections remain a strong draw for investors, with 73% reporting they are “satisfied with their standard of care” and not seeking a new advisor when working with one who must “always act in their best interest.” Forty-eight percent said the same when working with an advisor who might recommend products that put the advisor’s interests ahead of a client’s interests.
