Page 21 - Investment Advisor October 2022
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RIA

                      What’s Behind























                      Growth?















                   Industry VIPs break down RIA growth trends — from the wave of


                     dealmaking to other ways RIAs are expanding their practices.



                                                            BY JEFF BERMAN

                           alk about a growth story: The number of invest-  “Main Street”-style firms in 2021, with 50 employees or less,
                           ment advisors registered with the Securities and   according to the report. In terms of geography, gains in the
                   TExchange Commission, the number of clients they   number of advisors based in the South “have outpaced gains
                   served, the assets they managed and the number of people   in other parts of the country,” it says. “The growth in Florida
                   they employed all reached record highs in 2021, accord-  was the strongest in the nation, while New York numbers
                   ing to a report released earlier this year by the Investment   have fallen.” (Florida has 737 firms in 2021 vs. 636 in 2020.)
                   Adviser Association and National Regulatory Services.  Meanwhile, assets under management by SEC-registered
                     The tally of SEC-registered investment advisory firms   firms grew roughly 17% to a record high of $128.4 trillion
                   increased nearly 7% in 2021 — or by 926 firms from 2020 —   in 2021. Industry assets have increased in 18 of the past 21
                   to 14,806 firms, the “Investment Adviser Industry Snapshot   years, declining only in 2002 and 2008 because of market
                   2022”  report  states.  The  number  of  SEC-registered  firms   conditions. As in prior years, almost all assets were managed
                   has increased in 19 of the last 21 years. Registrations   on a discretionary basis (91.5% in 2021), the report said.
                   declined only in 2010 and 2011, when the minimum size   The number of clients served by SEC-registered advisors
                   threshold for SEC registration grew to $100 million in assets   grew close to 6.5%, reaching a record high of 64.7 million
                   under management from $25 million, the report noted.   clients, including 53 million asset management clients.
                     The vast majority of advisors (88%) worked in smaller   Meanwhile, some 60% of advisors provided asset manage-



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