Mapping the explosive growth of RIAs

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New RIA registrations each year have more than doubled since the start of the millennium, according to an exclusive Financial Planning review of state notice filings. The same period has also seen explosive growth in RIAs’ state registrations, a sign that RIAs are expanding their national footprint.

The number of new RIAs to register with the SEC has grown to 275 in 2016 from 110 in 2000, and an increasing percentage of them also file with multiple states. So far in 2017, nearly 70% of newly registered RIAs filed multiple state registrations within the same year, compared to fewer than 15% in 2000.

2000  2017

Source: SEC

Open our interactive graphic to see the RIA expansion in detail. Use the switch in the top-right of the map to toggle between total filings and year-by-year changes and use the slider to see data each year starting in 2000.

The average number of RIAs registered in each state has grown by an order of magnitude over the last decade. New firms drove the growth, but so did expansion of existing RIAs. The number of RIAs registered in all continental states has more than doubled over the last decade, reaching an all-time high of 173 firms.

“Clients secured in one state may retire to another state and hence an RIA must register in new states,” says Chip Roame, managing partner of consultant firm Tiburon Strategic Advisors. The growth, he says, signifies that “financial advisors are building multi-state businesses, sometimes organically and sometimes through acquisitions.”

More RIAs are on the path to becoming nationwide, according to Roame, whose firm counts around 20 RIAs that appear to be making a national push.

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FP excluded Wyoming, because the state only started requiring registrations this year. An RIA is required to file notice filings with a state if it has a physical presence in the state or has clients there.

While an RIA is not required to have clients in a state to submit notice filings, most RIAs would not bother unless they have clients there, says industry consultant Jamie McLaughlin.

“Registration will require filings, and there is a fee to register,” says McLaughlin. “Generally, you wouldn’t register and deal with compliance unless you have to.”

The study focused on RIAs that offer financial planning services with more than 50% of AUM attributable to individuals.

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