There were more RIAs in 2023 than ever before, but what does a typical firm look like?

investmentnews.com:

The number of RIAs reached a new record high in 2023, with 15,396 registered with the SEC, up from 15,114 in 2022 which was the previous all-time high.  It was the 12^th consecutive year of growth.

A new report from the Investment Adviser Association provides a snapshot of advisory firms in a year when total industry AUM rebounded almost 13% to match the record high of $128.4 trillion that was last seen in 2021.

Asset management client numbers also grew year-over-year at a 4.4% pace to reach 56.7 million, while overall clients rose by 3.5%. Individual asset management clients have increased over the past six years by almost 13% per year and in assets managed for those clients by 15% per year.

The report also identified 5,390 exempt reporting advisers filing Form ADV with the SEC and 3,940 filing with state authorities, managed over $6 trillion in private fund gross assets.

Across the industry, most RIAs (almost 93%) had fewer than 100 employees and around 88% managed less than $5 billion in assets with 69% managing less than $1 billion. These lower-AUM advisors accounted for almost all of the new SEC registrations in 2023 and new registrants accounted for almost 10% of these sub-$1 billion firms.

For RIAs focused on individual clients, most are small with an average nine employees, two offices, and $365 million AUM. Nearly 20% of SEC registered advisors are affiliated with another SEC registered advisor.

For state-registered advisors, the average number of employees is two with AUM of $26 million, they have an estimated 285,000 financial planning clients and over 218,000 clients that use services other than asset management.

“The 2024 Snapshot highlights just how significant of a segment SEC private fund advisers, and