The registered investment advisor industry hit several record highs in 2024, including for the number of SEC-registered advisors, employees, clients, and client assets under management, according to an annual report from the Investment Advisor Industry.
According to the report, which is in its 25th year, the number of SEC-registered advisors rose 3.1% to 15,870 in 2024, serving 7% more clients than in 2023, at 68.4 million. Meanwhile, the assets those advisors were overseeing also grew, partly due to strong market conditions, by 12.6% to $144.6 trillion.
“It was a strong year economically,” said Karen Barr, president and CEO of the IAA. “You see the assets going up as the markets go up, and you also see people are able to save, and therefore they’re investing more and they’re seeking more investment advice.”
If state-registered advisors are included, the total number of advisors in the U.S. at the end of 2024 was 20,483.
Meanwhile, hiring at registered firms rose 2.6%, with 25,984 jobs added to reach a total of 1,032,455 non-clerical staffers.
Barr noted that despite the steady growth in registrations and employee count, the advisor population is still an older group that will need serious replenishment in the years ahead.
“I think that one of the things that is crucial about our industry to educate about is that yes, it’s financial adjacent, but there are all kinds of people-facing and client-facing positions in this space—you need to be a people person,” she said. “You can learn the financial planning aspects of it, but if you’re a people person, this is a great field.”
To that point, the 2024 showed an increase in advisors offering financial planning services beyond investment management at 45.2%, a jump from 32.6% in 2000.
In the meantime, the trend toward advisors moving from the broker/dealer space to the advisor space has continued, with advisors less likely to be affiliated with a brokerage firm. That group stood at 15.8% as of the end of 2024, compared to 37.6% back in 2001.
What Barr finds interesting about registration shifts is that, while the number of registered representatives remained relatively flat at about 628,392 through 2023—the most recent data available—those with dual licenses continually increased.
“Just looking at the overall compensation of the individuals providing services out there, more and more of them are choosing to wear two hats as both broker/dealer and investment advisors,” she said. “I also think that is a really stronger indicator of folks on the broker/dealer side moving more and more into the advisor space, either altogether, or doing both …. but the result is more and more people are providing investment advice.”
Regarding charging for that advice and services, 78.1% of advisers offered asset-based fee arrangements combined with other fee types, including fixed, performance, or hourly fees. Only 4.7% of advisers didn’t offer a fee based on AUM.
Barr also reiterated that the advisor space remains dominated by small business operators. This year’s report showed that 58.3% of advisors have AUM between $100 million and $1 billion, and 87.7% have fewer than 50 employees.
Meanwhile, the bigger firms dominate the asset pool, with those with more than $100 billion in AUM holding 68.4% of the assets in the industry.
Barr said the IAA continues to lobby policymakers for the smaller players to be regulated differently than their larger peers. She noted that, with the new administration and leadership at the SEC and other regulators, there is a chance for a “reset” in this regard.
The association is supporting the passage of the Small Entity Update Act, which was voted through by the House Financial Services Committee earlier in May. The act requires the SEC to better account for small businesses, and Barr is “hopeful that is going to pass.”
IAA’s report is done in conjunction with COMPLY, which works with chief compliance officers at RIAs and includes firms focused on asset management.
Barr noted that next year’s report may look different as the markets and economy have been facing volatility. She noted speaking with advisors in her network who have been working hard to calm and strategize with clients and those who are pausing hiring or taking other actions.
“I’ll be interested to see what happens this year,” she said. “I suspect this year might not be such a straight line as the last several years.”
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