RIA industry snapshot displays growth of wealth management

Registered investment advisory firms topped previous records in many key business metrics in 2024, with assets under management crossing $144.6 trillion.

The number of firms registered with the Securities and Exchange Commission and their AUM, clients and employees reached new heights from prior records, as shown in the below charts based on the latest yearly “Investment Adviser Industry Snapshot” by the Investment Adviser Association, a trade group, and COMPLY, a compliance firm.

The overall figures, though, obscure some challenges posed by the need for organic growth rather than through M&A and asset appreciation. And any financial advisor thinking about joining an RIA or launching a new one must consider factors ranging from the macroeconomic forces affecting the entire industry to the many potential issues that could play out among their clients and employee teams, according to Julie Genjac, the vice president of applied insights for Hartford Funds, where she coaches advisory teams in practice management.

“Interestingly, many new entrants into the RIA space are not immediately looking to scale or merge,” she said in an email. “Instead, they’re eager to test their independence, see how their team functions autonomously and gain firsthand experience running their own firm. While some may eventually choose to join a larger RIA for added infrastructure and support, the initial appeal of independence continues to drive a steady stream of new firms into the market. This trend underscores the enduring appeal of autonomy and customization in wealth management and suggests that, despite consolidation headlines, the entrepreneurial spirit within the industry remains strong.”

Other trends fueling the RIA movement stem from that flexibility in areas like marketing, client experience and the business model of a firm, and the way that advisors are “increasingly attracted to the opportunity to retain a greater share of revenue while also having the freedom to design compensation models that suit their teams,” Genjac added.

As with any study tracking RIAs, the IAA/COMPLY industry snapshot chooses specific criteria that will bring some data noise to any conclusions about the wealth management business. The report covers every type of SEC-registered firm, so the numbers include both wealth and asset management firms and those catering to retail clients and institutions. That’s why its figures look so different from, for example, Financial Planning’s annual RIA Leaders study focusing specifically on fee-only planning firms. 

But that doesn’t detract from the notable underlying trend of the scale of RIAs and their changing nature reflected in the IAA and COMPLY study. Far fewer RIAs have brokerages affiliated under common ownership, and 45% provided financial planning services at the end of 2024 — up from only a third in 2000.

“Business models have evolved,” IAA CEO Karen Barr and COMPLY Chief Regulatory Services Officer Jamila Mayfield wrote in the introduction to the report. “A significant number of [RIAs] now have a national reach as mergers and acquisitions have increased their size and footprint. The competitive landscape is changing as brokerage, insurance and banking firms combine advisory activities with transactional services. Investment strategies have adapted to take advantage of new opportunities (such as the growing private markets), as have the investment vehicles that make them available to investors (including wrap programs and ETFs).”

Scroll down the page to see five charts tracking the growth of SEC-registered RIAs, courtesy of the data from the annual “Investment Adviser Industry Snapshot” report by the Investment Adviser Association and COMPLY. To see FP’s ongoing series on launching and running a successful RIA, click here. For a look at another report on why some advisors and executives express some skepticism about RIA growth, follow this link. 

Growing to the tune of trillions

After a strong year in 2024 for stock and bond values, assets under management at RIAs surged by 12.6% to a record $144.6 trillion. Their AUM has gone up by an annualized average of 8.5% since 2000. 

The number of RIAs keeps going up, despite consolidation

Even though the volume of industry M&A deals frequently sets records each year, the number of SEC-registered RIAs has moved up in each of the last 12 years. In 2024, the number of firms ticked up 3% to a record 15,870. 

Tens of millions of clients

The overall number of individual and institutional clients has reached a record 68.4 million, but RIAs include both retail-facing wealth management firms and fund companies. Regardless, the number of individual clients of SEC-registered RIAs has climbed by more than 22 million people in the past six years.

RIA employment data

After the eighth straight year of increases in employment at SEC-registered RIAs, the number of non-administrative workers rose 2.6%, or 25,984 jobs, to a record 1.03 million. However, that rate of job gains came in slightly smaller than the 3.2% yearly average during the past decade.

The key caveat with RIA growth

Despite those record-breaking metrics across the RIA channel, much of the surge stems from the simple facts that asset values rose and the U.S. economy expanded over time. That’s why the efforts to generate organic growth and recruit and retain advisors who bring that ability to their firms represent such an important competitive fight among RIAs.