RIA assets on the rise, study says

Registered investment advisory firms have realized an average growth rate of 55% over the past three years, according to new analysis released today from Boston-based Fidelity Investments. The study showed 28% of the RIA firms have experienced growth of more than 100%. The study, “Fidelity RIA Metrics, Profiles of the Fastest Growing Firms,” analyzed RIA firms with assets of at least $25 million. It showed that those firms that have grown at least 100% in three years were typically at least nine years old and were likely founded by breakaway brokers. “We’re seeing a trend where relatively young firms that broke from their broker-dealers five-to-nine years ago and focused on aggressive growth of their asset base appear to have reached a level of critical mass where their assets are virtually doubling every three years,” said Gail Graham, executive vice president of Fidelity Institutional Wealth Services, in a statement. Meanwhile, RIA firms expect to face major challenges this year running their firms, the study showed. But the challenges facing larger RIA firms at with least $500 million in assets and those smaller firms with $25 million to $50 million in assets are different. For instance, 69% of the largest firms cited improving back-office efficiency as a major challenge compared to 54% of the smallest firms. While, 65% of the largest firms said maintaining margins and profitability was a challenge compared to 39% among the smallest firms.