The strong rebound from the market lows of March 2009 has produced record-high AUM levels for RIAs, but higher costs means revenue is still lagging, according to the latest Rydex|SGI AdvisorBenchmarking study.

The average advisory firm saw assets under management rise 28% last year, to $174 million from $136 million in 2008. That percentage increase is the highest in the survey's 11-year history.  

The survey of 427 RIA firms found 42% expect their AUM to grow another 11% to 20% during the next five years, and that 79% of advisors expect growth to come from referrals from existing clients.

That said, survey respondents said that expenses were slightly more--and revenue slightly less--than peak levels from 2007. Last year's median profit margin of 19% equaled the prior year, but that still trails levels from five years ago.

In addition, the survey found that 31% of advisors cut back on principal compensation in favor of investing that money back into their practice. At the same time, just 8% of advisors trimmed compensation for administrative and support staff.

The chief concerns cited by advisors were finding new clients (79%), too much government regulation (71%) and the need to boost technology spending (68%).

Elsewhere, advisors on average spent 10% of their time on client service last year versus 15% in 2008, and 22% are offering investment management services to other advisors.

The survey was conducted from February through April 2010.