The number of federally registered investment advisors is growing at a record-breaking rate despite a fickle market in recent years, greater demand for digital services and shifting fee structures.
The number of investment advisors registered with the U.S. Securities and Exchange Commission (SEC) reached an all-time high of 15,396 in 2023, according to a report jointly released June 20 by industry and lobbying group the Investment Adviser Association (IAA) and compliance firm COMPLY.
Those advisors also represented more than 56 million clients and managed $128.4 trillion in assets in 2023 — a 12.5% growth from 2022 that brings the AUM level back to the historical high reached in 2021. Part of that asset growth is driven by a more bullish market since 2023. But the annual “snapshot” report suggested that the increase in advisor numbers over the past five years, as well as a return to smaller firms holding more managed assets, may indicate the industry is stabilizing.
“There’s been a lot of market volatility the last several years and I think more and more people are looking for some help managing their money,” said Tom Graff, chief investment officer at Facet, an online platform that matches prospective clients to a fee-only fiduciary advisor. “There was something of a stagnation in 2021 and 2022, perhaps because some people found success investing on their own during the booming 2021 market. But now I think we’re returning to a more normal pattern of slow but steady growth.”
READ MORE: Advisor figures up in 2022 even as AUM and client totals fall
Scroll down for a look at how the report showed the industry has evolved the past decade in terms of firm size, client demands and social media engagement, as well as changes to fee structure and managed asset services.
