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The number of advisors registered with the Securities and Exchange Commission continues to rise, reaching 13,494 advisory firms in 2020, a net increase of 501 advisors, or 3.9%, over 2019, according to the latest poll by the Investment Adviser Association.

RIAs’ assets under management also shot up to a record $97.2 trillion, reflecting 16.2% growth from $83.7 trillion, in an industry where more than 87% of firms are small businesses, states the annual Evolution Revolution report, written by IAA and National Regulatory Services to provide a snapshot of the SEC-registered advisor universe.

This year’s IAA/NRS report is based on data from before COVID-19 was declared a global pandemic in March, IAA and NRS reported.

“The pandemic upended business as usual for the advisory community and the entire global economy,” IAA president and CEO Karen Barr and John Gebauer, president & CEO of NRS, said in releasing the report Tuesday.

“Advisory firms implemented their business continuity plans and pivoted to a work-from-home posture almost overnight while continuing to serve their clients with a calm and steady hand. As a result of the dramatic shift in firms operating from many more physical locations and related changes in their operational structures, advisors will need to continue to devote more resources to technology and continued operational resilience measures.”

Other notable findings from the report:

  • In 2020, SEC-registered advisors reported a total of 871,971 nonclerical employees — up 4.4% over 2019. Of these employees, more than half (451,536) provide investment advisory services (including research) — a healthy increase of over 15,000 since 2019.
  • The aggregate RAUM managed by SEC-registered advisors has grown to a record $97.2 trillion, a 16.2% jump from $83.7 trillion in the 2019 report.
  • The vast majority of SEC-registered investment advisors are small businesses. In 2020, 57.4% (7,749) of advisory firms reported that they employ 10 or fewer nonclerical employees, and 87.6% (11,819) reported employing 50 or fewer nonclerical individuals. At the opposite end of the spectrum, the largest 116 firms employ 53.7% of all nonclerical employees.
  • Asset-based fees continue to dominate in the investment advisory profession, with 95.4% of advisors indicating this year that they are compensated based on a percentage of their assets under management.

— Check out Advisors’ Social Media Use Surges Despite Compliance Challenges on ThinkAdvisor.