RIA firms – and their assets -- are booming.

Assets under management among SEC-registered advisors nationwide increased 12.6% to $61.7 trillion in April, according to the 14th annual Investment Adviser Association and National Regulatory Services Evolution/Revolution report released Tuesday. In order to register with the SEC, advisors need to have a minimum of $100 million in assets under management, which was raised from $25 million following the implementation of the Dodd-Frank Act, passed in 2010.

John Gebauer, managing director at NRS, attributes much of the AUM growth to an increased client base, which jumped 9.3% to 27.8 million, up from 25.5 million in 2013. The category of firms with $100 million to $1 billion AUM, added the most new firms. This group added 218 firms, growing 3.7% year-over-year to 6,085.

The total number of advisory firms registered with the SEC rose 3.4% to 10,895 as of April 7, up from 10,533 in 2013, according to the IAA/NRS study. The report covers all SEC-registered RIAs, a group it defines as including wirehouses.

"The growth in the number of advisors and assets under management shows this is still an attractive business model that attracts new professionals and assets in the marketplace," says Gebauer. "It is a positive indication."



The nation's 1,895 SEC-registered advisory firms account for more than 700,000 employees, according to the IAA/NRS report. More than half of the investment advisors operate as smaller practices with 57% reporting 10 or fewer employees and 53% having five or less staffers engaged in investment advisory functions. The vast majority (88%) reported employing 50 or fewer people.

Some other key findings from the IAA/NRC report include:

  • The vast majority of SEC-registered advisors (94.8%) report that they are compensated based on a percentage of their clients' AUM.
  • More than one-third of all SEC-registered advisers (36.2%) reported that they manage at least one private fund.
  • The 112 advisory firms with $100 billion or more in AUM collectively accounted for 53% of all reported AUM.
  • The number of advisors choosing to custody client assets has increased by 41% since 2011, up to 3,518 in 2014.

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