A Profile of the Investment Adviser Profession - Evolution Revolution 2015
The 15th annual Evolution/Revolution report is an in-depth study analyzing annual updates filed by investment advisers registered with the U.S. Securities and Exchange Commission (SEC). The 2015 report is based on information on file with the SEC as of April 8, 2015.
This annual joint study by the Investment Adviser Association (IAA) and National Regulatory Services (NRS) – shows impressive growth for federally-registered investment advisers across all major metrics, including number of firms, clients and assets under management.
Derived from Form ADV, Part 1 data filed by all SEC-registered investment advisers as of April 8, 2015, 2015 Evolution Revolution is the most comprehensive profile of advisory industry metrics available.
This year’s findings demonstrate the following:
- The industry remains a powerful job creator. Since 2014, investment advisers have added more than 31,000 non-clerical jobs – a 4.3% increase and now employ more than 750,000 individuals.
- The number of investment adviser firms grew by a healthy 5.3% – the largest increase in four years – adding 578 advisers, for a total of 11,473 firms.
- The number of clients served by investment advisers jumped as well – by nearly two million. That’s an increase of 6.8%, to nearly 30 million clients.
- Investment advisers are managing significantly more assets – a total of $66.7 trillion in aggregate regulatory assets under management (RAUM), an impressive 8.1% increase over 2014.
Although a relatively small number of advisers manage a high percentage of total RAUM, the concentration of assets underscores the reality that the investment adviser profession remains dominated by small businesses. While 128 firms (those managing $100 billion or more), or 1.1% of SEC-registered advisers, collectively managed 54% of total RAUM, the remaining 46% of RAUM is managed by more than 11,300 firms. In fact, more than half of all advisers – 57.3%, or 6,576 – reported having 10 or fewer non-clerical employees. And over 10,000 firms – fully 87.9% – reported having 50 or fewer non-clerical employees.
The data in 2015 Evolution Revolution also highlights the diversity of the investment adviser profession. While many advisers serve a broad range of clients, nearly two-thirds – 64.1% – primarily serve one client type. For instance, more than one in five advisers – 22.8% – derive most of their RAUM from pooled vehicles other than mutual funds and ETFs. Similarly, another 29% specialize in serving individuals, and while nearly half of advisers have at least one pension client, only 2.7% primarily serve pension clients.