The ranks of billion-dollar independent registered investment advisors are growing faster than ever, and the forces behind that growth are changing.
According to new research from FINTRX, a private wealth intelligence platform, the latest quarter saw 167 firms cross the $1 billion assets under management threshold – with 18 of those having registered with the SEC after 2020, meaning they achieved billion-dollar scale in under five years.
"That wasn't common 10 years ago," said Greg Bell, VP of Enterprise Accounts at FINTRX, in an interview with InvestmentNews. "I worked in the market 20 years ago and a billion-dollar firm was a very large firm. Now, a $500 million or billion-dollar firm is kind of very regular."
By FINTRX's count, California, Florida, New York, and Texas are the leading states for firms crossing the billion-dollar mark, driven by concentrations of high-net-worth clients, favorable economics, and deep talent pools.
The Investment Adviser Association's Snapshot 2026 report, released last week, tracks all federally registered RIA firms across the US. As of last year, California alone was home to 8,019 advisory firms managing approximately $23.8 trillion in assets, underscoring just how dominant the West Coast state remains in the national wealth management landscape. New York followed with 4,627 firms and roughly $38.5 trillion in AUM, reflecting the deep institutional roots of the Empire State.
Texas has 3,915 advisory firms overseeing more than $4.6 trillion in client assets, per the IAA data. Florida, which has seen significant population inflows from higher-tax states, is home to 3,499 firms with over $4.1 trillion in AUM.
One state came up as a genuine surprise for FINTRX. "The one that really stood out to us was Wisconsin," Bell said. "There are eight firms that actually surpassed a billion – which is tied with Texas and actually ahead of New York. Very interesting to see that in terms of how it's grown over time."
Wisconsin's 562 advisory firms collectively manage approximately $1.27 trillion in assets, per the IAA. That concentration of established, scaled practices – combined with a less crowded competitive environment – may be contributing to the conditions for firms to reach critical mass.
While organic growth is a key focus for RIA firms, Bell stressed that it's often not enough to make a new billion-dollar RIA. The more common path he sees is through teams migrating from wirehouses and independent broker-dealers – or through acquisition.
"We're seeing a lot of teams that are well established – $500 million, billion-dollar-plus teams – leaving the likes of Morgan Stanley, Merrill Lynch, and other major broker-dealers and now moving into that independent RIA model," he said.
In many cases, those breakaway teams are getting support from existing RIA structures – think Dynasty Financial Partners or Sanctuary Wealth – rather than launching from scratch. "But in other cases, they are essentially hanging a shingle and building out their own business."
M&A is the other lever. Bell described an increasingly prevalent pattern: a $300 million firm acquires a $200 million firm to reach $500 million, and then continues building from there.
"Organic growth has been a big problem in the industry for some time," he said. "So we're seeing obviously more and more acquisition."
That M&A wave is also creating operational headaches for asset managers trying to sell into the RIA channel.
"Every day there is news about a new acquisition coming through, and the decision process is completely changing at these firms almost overnight," Bell said. "These asset management distribution firms have to really maintain a core focus on the evolution of the market so that they can access that money in motion."
The FINTRX data is also revealed nuances in client mix for larger firms. Bell said that 80% of firms crossing the $1 billion AUM threshold also serve institutional clients, compared with 68% of firms at the $500 million level.
"The bigger firms tend to have other avenues of business, not just simply retail and high-net-worth clients," Bell explained. "It could be retirement plans – so you're seeing a lot that have a significant percentage of their total assets in 401(k)s and similar plans they're managing for clients."
That diversification of revenue lines appears to be both a cause and a consequence of scale: larger firms have the infrastructure to serve institutional mandates, and those mandates in turn help firms grow larger still.
On the custodial side, Bell said Schwab remains the dominant player – "the 800-pound gorilla in the space" – followed by Fidelity and Pershing. But he noted growing momentum from Goldman Sachs and Altruist, a radical upstart that is increasingly appearing in conversations among RIAs weighing their custodial options.
The IAA data showed California's 8,019 advisors and New York's 4,627 represent two of the largest custodial markets in the country by firm count, while states like Pennsylvania (1,538 firms, $26.6 trillion AUM) and Massachusetts (1,912 firms, $19.4 trillion AUM) are significant secondary centers.
The use of alternative investments at billion-dollar RIAs has also moved well beyond experimentation. Bell said that the vast majority of firms at this scale now offer some level of alts exposure, and many are going further – building internal expertise and, in some cases, launching their own fund-of-funds vehicles.
"More and more firms are leveraging platforms like iCapital and CAIS," Bell said. "And a lot of these firms are launching their own private funds that are also fund-of-funds, so you can think of that as a vehicle they could potentially market out to their clients."
On Monday, RFG Advisory revealed a strategic partnership with iCapital, giving its advisors streamlined access to private equity, private credit, hedge funds, and structured investments.
In terms of specific asset classes, private real estate leads the field as roughly two-thirds of billion-dollar RIAs FINTRX surveyed reported allocations to it. Hedge funds were the second most common, at approximately 41% of firms, followed by private equity at 28%.
Venture capital and private credit round out the list, with growing adoption for the latter even as its recent troubles have led to growing scrutiny.
The appeal of alternatives, Bell said, comes down to diversification, lower market correlation, and access, particularly for clients who expect a higher standard of service.
"Many high-net-worth investors are now expecting to have exposure to those types of investments," he said. "It's almost as if you're not a part of that space, these firms are likely missing out."
Bell said more firms are positioning themselves as expert curators of alternative investments – building dedicated investment committees with specialists in hedge funds, private equity, and private credit in order to construct their own selections of choice managers and funds.
"They cannot do this effectively themselves," he said of clients. "So they need the expertise."
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