The investment advisor industry continued to experience record-level growth through 2019, including in the number of registered advisors and assets under management, according to the 2020 Evolution Revolution Report.
Released by the Investment Adviser Association (IAA) and National Regulatory Services (NRS), the annual report provides “a window into the upward trajectory of a dynamic industry that is vital for investors, the economy and capital markets.”
“In every key metric—from industry size to assets under management to high-quality jobs created—the investment adviser profession showed solid growth, underscoring our critical value to investors, to the economy, and to our capital markets,” IAA President and CEO Karen Barr said in a statement. “Investors continue to recognize the value of fiduciary advice, turning to investment advisers to help them achieve their goals and navigate their financial futures.”
Key findings
- The number of SEC-registered investment advisors continues to grow at a steady pace – and has reached yet another record high of 13,494 advisory firms, a net increase of 3.9 percent over the previous year.
- The aggregate RAUM managed by SEC-registered advisors has grown to a record $97.2 trillion, reflecting 16.2 percent growth from $83.7 trillion—in an industry where more than 87 percent of firms are small businesses.
- Private equity funds are pulling away from hedge funds in popularity, with 4,840 advisers reporting that they advise 40,742 private funds with a total gross asset value of $19.1 trillion, up from 4,520 advisers and 37,873 private funds and up from $14.9 trillion gross asset value in 2019. While the percentage of hedge funds and private equity funds was exactly equal four years ago, their popularity as a pool of choice continues to diverge. Private equity funds now make up over forty (41.2) percent of privately offered funds and hedge funds represent less than thirty (28.3) percent in the private fund space.