Total regulatory assets under management (RAUM) reported by all investment advisers as of 7 April was USD61.7 trillion, representing a substantial increase from the USD54.8 trillion RAUM reported in April 2013.
This is according to the Investment Adviser Association (IAA) and National Regulatory Services’ (NRS) 14th annual Evolution/Revolution report, a study analysing annual updates filed by investment advisers registered with the US Securities and Exchange Commission (SEC).
The total number of SEC-registered investment advisers increased from 10,533 in April 2013 to 10,895 in April 2014. These advisers employ more than 700,000 persons and serve almost 28 million clients.
“The report demonstrates that the investment advisory profession is dynamic and diverse,” says Karen Barr, general counsel of the IAA. “The data reflects the increasing demand for investment advice on behalf of individual and institutional investors and the significant role that investment advisers play in the financial markets.”
“The data shows that the investment adviser industry continues to grow across all market segments and by every measure,” says John Gebauer, NRS’s managing director. “It is evident that small advisers join the adviser ranks each year and constitute the largest market segment; yet, due to the growth across segments, the concentration of RAUM with the largest advisers has also increased, and this year the top one per cent of advisers manage more than 52 per cent of the total RAUM.”
The report also shows that advisers with less than USD1 billion RAUM account for 71.5 per cent of all SEC-registered advisers but manage only 3.5 per cent of all reported RAUM.
The number of clients that advisers serve increased by 9.3 per cent year-over-year.
Individuals continue to comprise the largest categories of clients of SEC-registered advisers. In 2014, 6,484 (59.5 per cent) investment advisers reported having at least some high net worth clients and 5,601 (51.4 per cent) reported having at least some non-high-net worth clients.
Most SEC-registered investment advisers are small businesses. In 2014, more than half of all advisers (57.1 per cent) reported having ten or fewer full-time and part-time non-clerical employees and 87.9 per cent reported having fewer than 50 such employees.
More than one-third of all SEC-registered advisers (36.2 per cent) reported that they manage at least one private fund. Private fund advisers reported a total of 28,429 private funds with collective RAUM of USD9.5 trillion – up 11.8 per cent from 2013.
Hedge funds comprise 40 per cent of all reported private funds while private equity funds comprise approximately 33 per cent.