High-net-worth individuals make up just 12.3% of total clients holding the $10.5 trillion RIAs manage on behalf of individuals. Non-high-net-worth individuals (82.2% of total clients and 87.0% of individual clients) make up the vast majority of RIA clients, the report found.
In an investment ecosystem where digital advice platforms and passive investment channels are playing greater roles, investors’ appetite for human-driven investment advice clearly remains strong, the IAA reported.
Advisors also report strong job growth, with a record total of 835,124 clerical employees—up 3.7% from a year earlier, which underscores “the investment advisor profession as a provider of high-quality jobs and an engine for small business creation and growth,” the IAA said.
The vast majority of SEC-registered investment advisors are small businesses, with 56.9% employing 10 or fewer non-clerical employees and 87.5% employing 50 or fewer, according to the report.
“This year’s report demonstrates that advisors are continuing to fuel the economy and the capital markets, providing high-quality jobs and adding new small business players in the financial services ecosystem,” Barr added.
Now in its 19th year, the “2019 Evolution Revolution” report is an annual joint study by the Investment Adviser Association and National Regulatory Services. The report offers a comprehensive profile of SEC-registered investment advisors, drawn from April 2019 Form ADV data from 12,993 firms.
This is the first report that compares new information reported on the amended version of Form ADV Part 1, which became effective on October 1, 2017. So it offers greater clarity about the detailed business practices of advisors, including details on how they invest separately managed accounts and how they use leverage and derivatives. It also offers more accurate data about their clients.