The RIA trade hit file highs within the variety of funding advisors, companies and shoppers in 2023, in keeping with a survey co-run by the Funding Adviser Affiliation.
Moreover, belongings managed by SEC-registered advisors jumped by 12.6% in 2023 from the earlier 12 months’s market downturn, matching related highs from 2021. The variety of advisors grew by practically 2%, in keeping with the annual snapshot co-created by the IAA and COMPLY, which works with chief compliance officers at RIAs.
Final 12 months, the variety of SEC-registered companies elevated by 282, hitting a file excessive of 15,396 companies (there have been will increase in 21 of the earlier 23 years, barring 2010 and 2011, although these downturns partially stemmed from the SEC rising the minimal measurement threshold for registration to $100 million from $25 million).
Moreover, the variety of non-clerical workers handed 1 million for the primary time final 12 months, rising 3.6%. Most workers and advisory companies are on the smaller finish of the spectrum, with 88% of advisors having lower than $5 billion in AUM (58.3% of that being within the $100 million to $1 billion vary).
Nevertheless, greater than 92% of shopper belongings have been managed at companies with greater than $5 billion in AUM, and 66% of belongings have been managed by the trade’s 207 largest companies, in keeping with the survey.
Companies with $100 billion+ AUM noticed probably the most sturdy development over the previous decade, although greater than half of this development consisted of companies increasing to this measurement. Employment development was additionally the strongest at these companies.
Companies underneath $100 million declined over this era (with a 17.2% drop previously 12 months). Nevertheless, in keeping with the IAA, during times of rising asset values, companies on this vary both transfer into extra vital classes or terminate their SEC registration altogether. In 2023, 1,114 new advisory companies shaped, whereas 832 advisors ended their registrations, leading to a complete of 282 new companies.
The full variety of shoppers serviced by registered companies jumped 3.5% to 64.1 million, regardless of a drop in non-asset administration shoppers for the second straight 12 months (which the IAA attributed to the expansion of digital platforms providing non-asset administration companies).
However, the whole variety of asset administration shoppers hit a file excessive of 56.7 million in 2023, a 4.4% leap from the earlier 12 months, in keeping with the survey. Greater than 85% of shoppers have been non-high-net-worth people (with lower than $1.1 million in AUM or internet value beneath $2.2 million), although 64.3% of whole managed belongings got here from the 14.7% of high-net-worth shoppers.
The share of advisors utilizing a number of web sites or social media platforms to speak with shoppers jumped to 65.2% in 2023 from 49.1% in 2018. LinkedIn continued to be the most-used social media platform, with 59.1% of respondents reporting they used it (up from 39.3% in 2018).
In 2018, 19.2% and 18.1% used Twitter and Fb, respectively. However in 2023, extra advisors opted for Fb; 26.1% of advisors used that platform, in comparison with 22% utilizing Twitter (now X). 10.8% and 10.1% used YouTube and Instagram, respectively.
