Fee-Only RIAs Lose Market Share to Hybrid Models
New research shows independent wealth firms losing asset share as hybrid and insurance-linked models expand.
Updated on Oct. 21, 2026 in Financial Planning
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Data from Cerulli Associates reveals that true fee-only registered investment advisors (RIAs) saw their market share drop from 42% in 2020 to 34% by year-end 2025. During the same period, hybrid RIAs and insurance-licensed firms gained significant ground as consolidation trends reshaped the industry.
Why it matters
The shift away from the fee-only model often occurs when firms are acquired or incorporate broker-dealer and insurance capabilities to meet growth targets. This transition highlights a broader struggle for independence as firms face pressure to adopt diverse revenue streams to maintain scale.
Fee-only firms grew at a 7.8% annual rate through 2025, significantly trailing the 12.4% growth for hybrid RIAs and 37.3% for insurance-licensed firms. Consolidators handled 53% of all RIA deals through September 2026.
The players
Cerulli Associates
This is a global research and consulting firm that provides data and analytics for the financial services industry.
Credent Wealth Management
Based in Indiana, this firm is an example of an entity navigating the evolving landscape of wealth management and outside capital.
The details
Many firms now convert traditional fee-based assets into commission products to hit organic growth metrics, often sacrificing their fee-only status. Investors who perceive that their advisor prioritizes personal interests show significantly lower satisfaction rates compared to those who view their advisor as a pure fiduciary.
Timeline
In 2009, 35% of affluent investors considered themselves advised.
In 2020, fee-only firms held 42% of assets.
At year-end 2025, fee-only firms held 34% of assets.
In 2025, 50% of affluent investors considered themselves advised.
Through September 2026, consolidators handled 53% of RIA deals.
Market Dynamics
The report illustrates how the rise of private equity investment in the RIA sector as documented by Cerulli Associates is accelerating the move away from the traditional fee-only advice model. This shift forces firms to balance investor demands for fiduciary-standard service with institutional requirements for rapid scalability.
Retail investors should verify whether their advisor is a fiduciary to understand if their recommendations are strictly in the client's best interest. As firms adopt hybrid models, clients may encounter more complex fee structures and an increased focus on commission-based product sales.
The takeaway
Investors should remain vigilant regarding the business model of their financial firm to ensure their advisor acts in their best interest. Asking pointed questions about product commissions and firm ownership can help clarify potential conflicts of interest.
Further reading
Learn more about the shifting advisory landscape in the United States Financial Planning section.
Source note: This article includes information reported by InvestmentNews.
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