The number of SEC-registered investment advisers continues to grow at a steady pace — and has reached yet another record high, reported the Investment Adviser Association and National Regulatory Services.
The advisory community continues to experience strong job growth, creating a record number of investment advisory positions. In 2019, SEC-registered advisers reported a total of 835,124 nonclerical employees — up 3.7 percent since 2018. Of these employees, more than half (436,256) provide investment advisory services (including research) — a healthy increase of over 20,000 since 2018.
The aggregate real assets under management (RAUM) managed by SEC-registered advisers has grown to a record $83.7 trillion. RAUM managed by investment advisers grew 1.4 percent from $82.5 trillion in the 2018 report to $83.7 trillion this year, despite significant market declines in December 2018.
While all SEC-registered advisers are fiduciaries providing investment advice to clients, the profession is highly diverse in size and type of firms, services offered, and clients served.
The vast majority of SEC-registered investment advisers are small businesses. Small businesses are the core of the investment adviser community. In 2019, 56.9 percent (7,387) of advisory firms reported that they employ 10 or fewer nonclerical employees, and 87.5 percent (11,367) reported employing 50 or fewer nonclerical individuals. At the opposite end of the spectrum, the largest 116 firms employ 53.3 percent of all nonclerical employees.
SEC-registered investment advisers serve more than 43 million clients. Individuals comprise the largest category of advisory clients. Individual clients (94.6 percent of total clients) — in particular, non-high-net-worth individuals (82.2 percent of total clients and 87.0 percent of individual clients) — comprise the vast majority of clients by a wide margin. High-net-worth individuals make up 12.3 percent of total clients. Investment advisers manage $10.5 trillion on behalf of individuals.
The bulk of RAUM resides in pooled vehicles. Registered investment companies ($28.1 trillion) and private investment vehicles ($22.2 trillion) together represent $50.3 trillion — 60.2 percent — of the total $83.7 trillion RAUM. The number of private investment vehicle clients are up by 18.9 percent.