Investment advisers registered with the Securities and Exchange Commission saw a significant jump in clients this year because more individuals have access to robo-advice, according to an annual study by the Investment Adviser Association and National Regulatory Services.
SEC-registered advisers reported a record 36.4 million clients, up about 22% from 2015 and the biggest jump in at least four years, the Evolution Revolution study released Tuesday by IAA and NRS shows. Last year advisers reported a 7% rise, to 29.7 million clients.
The growth was driven by the increase in automated advice for retirement plan participants and the growing popularity of web-based and app-based investment models, IAA and NRS said in the study. The proliferation of robo-advice is helping advisers reach a greater number of individuals with smaller investment accounts.
“The marketplace is making that much more possible than it ever has,” John Gebauer, president of NRS, said by phone. “Millennials who grew up texting everything on their phones” are now in a position to start investing and are more inclined to consider automated advice, he said.
The number of advisory firms reporting that they provide advice solely through an interactive website rose this year by almost 60%, to 126, according to the study.
The 16th annual Evolution Revolution report is based on data from 11,847 SEC-registered investment advisers managing a combined $66.8 trillion of assets. The median firm has $317 million of assets under management and from 26 to 100 clients, the study shows.