Adviser Industry Defies Pandemic, Sets New Growth Records

Adviser Industry Defies Pandemic, Sets New Growth Records

Reimagined Evolution Revolution Report Affirms Industry’s Resilience

June 28, 2021

 

Defying the challenges posed by the pandemic, the investment adviser industry continued to experience record-breaking growth in 2020 – with close to 14,000 SEC-registered investment advisers managing $110 trillion in assets for 60.8 million clients.

Those are among the topline findings of the Investment Adviser Industry Snapshot 2021, the reimagined Evolution Revolution report published for the past 20 years by the IAA and National Regulatory Services. The inaugural Investment Adviser Industry Snapshot 2021 includes more charts, more tables, and more analysis to make it easier to see and understand industry trends. For those who want to dive into the numbers, detailed data tables are available online in downloadable Excel files. State-by-state statistics on industry size, aggregate AUM, employment and number of clients are also available in our dedicated Industry Snapshot web section.

“We are proud of the responsiveness and resilience shown by the investment adviser community as they guided clients through unprecedented challenges,” said IAA President & CEO Karen Barr. “As the industry’s consistent growth demonstrates, investors recognize the value of fiduciary advice in helping them meet their financial objectives, whether planning for retirement, saving for homeownership, or funding an education.”

The key findings of the report include:

  • The investment adviser industry continues to experience record growth. The number of SEC-registered advisers, the number of clients they served, the assets they managed and the number of people they employed all reached record highs in 2020. Approximately 14,000 SEC-registered advisers have employed over 879,000 non-clerical employees who are managing $110 trillion in assets.
  • Individual investor demand for advice is surging. While all client segments have grown over the past three years, growth in both the number and assets of individual clients have been exceptionally strong, with the number of individual investors growing by 38 percent over the past two years.
  • Growth has been strongest for the largest advisers. Advisers with over $100 billion in assets have experienced gains in assets of 14 percent-plus annually over the past five years, far ahead of smaller advisers.
  • Compensation structures have become increasingly flexible. Over the past 20 years, advisers have become more likely to offer fixed fees and hourly fees in addition to asset-based fees.
  • Advisers are on the move. Compared to 2019, adviser offices were more likely to be in southern states and less likely to be in traditional financial centers.

“The data in this year’s report confirmed what we’ve known all along: demand for services provided by advisers continues to increase, even as supply rises. Advisory services are increasingly viewed as an indispensable and ubiquitous necessity for financial well-being for ever-greater portions of the population, the demand for which has been less sensitive to economic cycles than many other services,” said John Gebauer, President of National Regulatory Services.

 

TAGS: Industry Snapshot, Evolution Revolution, Karen Barr, Industry Statistics

 

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SEC COMMISSIONER PEIRCE KEYNOTE AT 2021 IAA COMPLIANCE CONFERENCE–In her keynote conversation with IAA President & CEO Karen Barr, SEC. Commissioner Hester Peirce discussed her concerns about recent agency initiatives involving climate change and ESG initiatives and other challenges facing the SEC.

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