The number of advisors choosing to break away from their broker-dealer and IBD firms to set up their own shops grew 20% in 2017, according to a new report from Charles Schwab.
The analysis, based on data from the Securities and Exchange Commission, shows that new RIA registrations reached 238 in 2017, up from 199 the previous year and capping a 59% jump since 2013.
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Generally only advisors who have at least $100 million in assets under management must register with the SEC. Advisors with fewer assets register with state securities authorities.
In the latest Schwab report, 30% of the new independent RIAs managed assets of $300 million or more, up from 25% in 2016 and more than double the 12% in 2013. The average AUM for new RIA firms in 2017 was $352 million, up 28% from the average in 2016, and the total combined AUM of the 238 new firms was $84 billion.
Another characteristic of the newly registered RIA firms in 2017: 64% choose to use a single custodian while 29% choose multiple custodians. That’s similar to the breakdown in 2015 but up from 55% and 34%, respectively, in 2016.