New Study from The Bank of New York Mellon's Pershing Advisor Solutions Unit Identifies RIAs Most Significant Threats, Opportunities for Business Growth

JERSEY CITY, N.J., August 14, 2007 — The Pershing Advisor Solutions LLC unit of The Bank of New York Mellon and Moss Adams LLP have released a new study entitled Uncharted Waters: Navigating the Forces Shaping the Advisory Industry.

As a component of Pershing Advisor Solutions' Ideas Without Limits practice management program, the study provides independent registered investment advisors (RIAs) with a comprehensive overview of dynamic challenges facing the advisory industry and the influence these market forces will have on RIAs' abilities to effectively service their clients and successfully grow their businesses in the future.

The study reports that the RIA market will continue to experience rapid growth, estimating the number of retail-focused advisory firms will grow to over 19,000 from the current 15,500 in the next five years. Leaders of independent advisory firms will be increasingly challenged by expanding market competition and more sophisticated, demanding clients, which in turn will place greater importance on attracting and developing bench-strength to help grow their practices. Essential to maintaining their current strategic advantage, advisory firms will need to educate consumers, take new steps to frame the publics' understanding of advisory services, and in so doing, clearly define the industry's quality standards. The top three challenges that RIAs will face over the next five years include:

• Dramatic Growth of the RIA Market Expected to Fuel Increased Competition — Demand for comprehensive and objective financial advice is growing rapidly. The study predicts that the average independent registered investment advisor will exceed $1 billion of assets under management by 2012. Furthermore, from an industry standpoint, this expected growth in assets represents a new annual revenue opportunity of $35 billion by 2012. Although growth is expected to remain robust, wirehouse brokers, insurance agents, bankers and mortgage brokers are creating more intense competition and less differentiation as their business models evolve to include services previously exclusive to RIAs;
• Growing Demand for Advice from Increasingly Sophisticated Clients — RIAs have enjoyed a strategic advantage for the last five years as consumers sought objective advice and a departure from commission-based compensation models. However, as competitors converge and consumers' needs change, the window of opportunity for RIAs to compete strategically is threatening to close. To be successful, RIAs will need to distinguish themselves from new competitors, explore opportunities to be more specialized and identify meaningful market niches where they can lend expertise;
• Competition Among RIAs is for Top Talent — Seasoned expertise is critical to an advisory firm's success. Moss Adams forecasts that by 2012, there will be close to 52,000 independent registered investment advisors practicing inside RIA firms. According to the study, 37% of advisory firms are actively recruiting RIAs. Creating an environment in which motivated employees can flourish plays an integral role in developing and retaining top talent. For advisory firms to stand out and position themselves as trustworthy, credible and knowledgeable, they must consistently attract high-quality independent registered investment advisors who, in turn, demonstrate these attributes to their clients.

John Iachello, chief operating officer of Pershing Advisor Solutions LLC, said, "As the business landscape and RIA market both continue to rapidly evolve, especially in light of changes driven by the Pension Protection Act and the recent ruling surrounding fee-based brokerage accounts, independent registered investment advisors will continue to face unique challenges to service their clients and grow their businesses. Our new independent study, Uncharted Waters, identifies these key challenges and provides RIAs with compelling information and insights to help them navigate through these changes so they can build and maintain a more successful practice."

Mark Tibergien, principal at Moss Adams LLP, said, "To capitalize on their current competitive advantage, registered investment advisors will need to develop niche segmentation strategies that consider a variety of client needs and carefully positions their service offerings against competition from the broad investment industry. What has worked for RIAs over the past five years will not necessarily yield the same results over the next five years."

The study, which was commissioned by Pershing Advisor Solutions LLC and independently executed by Moss Adams LLP, was highlighted at INSITETM 2007, Pershing's annual financial products and services conference. For a copy of the executive summary and full report, please e-mail Pershing Advisor Solutions at pasinformation@pershing.com.

Pershing Advisor Solutions LLC (member NASD/SIPC) is an affiliate of Pershing LLC and a leading provider of financial business solutions to independent, fee-based registered investment advisors and dually-registered advisors working in conjunction with many of Pershing LLC's introducing broker-dealer customers. Pershing LLC, a subsidiary of The Bank of New York Mellon Corporation, is committed to service excellence and to providing dependable operational support, robust trading services, flexible technology, an expansive array of investment solutions and practice management support. Through an innovative custody platform, Pershing Advisor Solutions delivers superior expertise and scalable and customizable solutions to help its customers manage and grow their fee-based businesses. Additional information is available at www.pershingadvisorsolutions.com.

The Bank of New York Mellon Corporation is a global financial services company focused on helping clients manage and move their financial assets, operating in 37 countries and serving more than 100 markets. The company is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services and treasury services through a worldwide client-focused team. It has more than $20 trillion in assets under custody and administration and more than $1 trillion in assets under management. Additional information is available at www.bnymellon.com.