The behemoth that is the SEC-registered investment advisor industry in the United States continues to grow, according to a new report.
It is now an industry managing assets of $144.6 trillion, a 12.6% year-over-year increase according to the Investment Adviser Association’s latest snapshot produced with Comply. Based on 2024 stats, it also reveals that the number of advisors grew to 15,870 (up 3.1% from 2023) and they served almost 7% more clients, a total of 68.4 million.
But the industry is not just about advisors of course and the report also shows an increase of 2.6% in non-clerical employees in the industry, meaning that more than 1 million are now part of the investment advisory landscape.
Most firms are relatively small, with 93% employing no more than 100 people, roughly unchanged over recent years, and 68.5% of firms manage less than $1 billion AUM and 87.8% manage less than $5 billion.
The median firm has just eight employees, two offices, and manages $393 million. Over half of firms have served non-HNW clients since 2001.
As the industry evolves, the report shows that more advisors are offering financial planning (45%) compared to 25 years ago (33%) and advisors are less likely to be dual registered as or affiliated with a brokerage firm (15.8% in 2024 versus 37.6% in 2001).
Mergers and acquisitions in the industry have increased substantially with 29.3% of terminations of SEC registrations (as reported in Form ADV-W) in 2024 resulting from transactions. In 2014 just 14.5% were.
“This anniversary edition showcases the tremendous growth and dynamism of the investment adviser industry over the past 25 years,” said IAA President & CEO Karen Barr. “What hasn’t changed are that strong fiduciary principles and small businesses serving individual investors continue to be at the heart of this community.”
The report also highlights growth in the number of private equity funds, up 8.1% in 2024, while the number of hedge funds decreased slightly. However, hedge fund gross assets increased 14.6% during the year, compared to a 9.2% increase in private equity fund gross assets.
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