Fewer registered investment advisors than expected have switched from oversight by the Securities and Exchange Commission to state regulators, says a new report by the North American Securities Administrators Association.

The association originally estimated in 2009 that up to 4,000 RIAs would make the transition after the Dodd-Frank Act raised the threshold for SEC regulation to $100 million in assets under management from $25 million. But since Dodd-Frank's enactment in June 2010 and February 2013, only about 2,100 have made the change, the association says.

Former association president and current Alabama Securities Commission Director Joe Borg told Financial Advisor magazine that some advisors might have stayed put to avoid stricter state regulations. He noted Dodd-Frank allows advisors with between $25 million and $100 million in AUM to stay under the SEC if they are registered in more than 15 states.

“One of the reasons investment advisors tried to avoid state registration is that under state supervision they would have been more likely to have more frequent and tougher exams, which was the whole reason to switch from the SEC,” Borg said. Last year, 8 percent of advisors under SEC control were examined. Forty percent of SEC-registered advisors have never had an exam, which the agency attributes to a shortage of money.

Borg also noted that between 2009 and this year, many RIAs merged and many wirehouse advisors went independent, trends that pushed more firms over the $100 million mark into SEC oversight.