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The goal of the study, conducted by Cerulli Associates, a global research and consulting firm specializing in asset management and distribution trends worldwide, is to identify target audiences and educational strategies for the OIC that may lead to increased adoption of exchange-listed options strategies among financial advisors.
The study said that on average, independent registered investment advisors RIAs who currently use options use them across 28 percent of client accounts, the broadest use across channels.
Options investment council addition, independent RIAs and hybrid RIAs expect the greatest increases in options usage rates across client accounts in the next three years, from 28 percent and 22 percent to 39 percent and 33 percent, respectively. The study also noted that employee channel advisors wire house and options investment council and regional broker-dealers who currently use options report the highest volume of trades, with 35 percent of these advisors executing more than 20 trades annually in a typical client account.
By contrast, only 21 percent of independent advisors who currently use options report doing options investment council than 20 trades annually for clients. Higher frequency of trading is likely supported by greater centralized support services, especially at wire house firms, where advisors report a higher overall level of centralized firm resources than other channels.
When assessing the opportunity set for increasing adoption of use, it is important options investment council consider not options investment council the frequency of use, but also the depth of use, as these behaviors may not occur simultaneously. According to Cerulli Associates, advisors who currently use options appear willing to expand their use of options strategies beyond the traditional use of covered calls, long calls and options investment council puts.
Though use is less prevalent than that of the strategies listed above, many advisors also use protective puts, option spreads, short calls and puts, cash-secured puts, and collars. Almost 80 percent of independent RIAs report using protective puts, the highest usage rate among all channels. Income generation is a primary objective for these advisors.
However, they place a greater emphasis on downside risk and portfolio diversification than advisors from small teams. Nearly 60 percent of advisors from the largest practices frequently cite downside risk protection as a goal of using options, while only 37 percent of advisors from smaller teams do. OIC and Options investment council Associates teamed up for the first time to get a better understanding of the behavior of advisors options investment council use options strategies with clients and those who do not.
More than advisors across various distribution channels were surveyed on how, when and why they used options. Read the full study and view more findings. Its mission is to provide free and unbiased education options investment council investors and financial advisors about the benefits and risks of exchange-listed equity options. Managed by OCC, OIC offers education which includes webinars, podcasts, videos, seminars, self-directed online courses, mobile tools, and live help.
OIC's Roundtable is the independent governing body of the Council and is options investment council of representatives from the exchanges, member brokerage firms and OCC. For more information on the educational services OIC provides for investors, visit www. Headquartered in Boston with offices in London and Singapore, Cerulli Associates is a global options investment council and consulting firm that provides financial institutions with guidance in strategic positioning and new business developments.
Our analysts blend industry knowledge, original research, and data analysis to bring perspectives to current market conditions and forecasts for future developments. OIC Angela Kotso May 11, About Options investment council Associates Headquartered in Boston with offices in London and Singapore, Cerulli Associates is a global research and consulting firm that provides financial institutions with guidance in strategic positioning and new business developments.
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