25 Largest Independent RIAs by Client Assets

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Over the past decade, RIAs have grown faster than any other type of wealth management firm. Yet because more than 5,000 of them compete in the wealth management marketplace, it can be challenging to understand the different business models they employ and how these affect firms’ ability to participate in different segments of the wealth market.

In a new report, Aite-Novarica Group evaluates the RIA market by business model and size.

Researchers analyzed RIAs’ annual filings with the Securities and Exchange Commission for calendar years 2019 and 2020, as found in the SEC’s Form ADV database. They used cluster-analysis techniques to classify the firms filing into seven different firm types, and then focused the analysis on two types of independent RIAs — fee-only and hybrid.

In addition, they tapped the Federal Reserve’s Survey of Consumer Finances to fill in missing data about the retail market and to develop market-sizing estimates for U.S. high-net-worth and non-high-net-worth households.

Fee-Based vs. Hybrid RIAs

The analysis showed that independent RIAs collectively manage $4.3 trillion in assets, including $3.1 trillion of high-net-worth assets.

Both types of independent RIAs in the analysis enjoyed strong growth in 2020, with the number of fee-only RIAs increasing by 15% and the number of hybrid RIAs by 8%. Assets under management grew even faster, thanks to market appreciation: 22% at fee-only firms and 20% at hybrid firms.

According to the report, hybrid-only RIAs are more oriented toward the retail market and less toward the high-net-worth market than fee-only RIAs, leading to several differences in their fee models and their services.

For example, 80% of hybrid firms charge fixed fees that are not tied to assets under management, compared with 63% of fee-only firms, and 89% of the former offer a broad suite of services such as financial planning, while 73% of the latter do so.

Large RIAs, those with $750 million or more under management, account for just 19% of RIAs but manage 73% of assets at independent RIAs. With their larger scale and infrastructure, these firms offer a wider range of services than midsize and small RIAs.

They are also more efficient in operating their businesses, as evidenced by their larger advisor account loads and more assets under management per client and per employee.

According to the report, the top 25 RIAs managed $793 billion in client assets at year-end 2020. These elite firms grew their assets under management by 24% in 2020, slightly faster than the 21% growth of the RIA market as a whole.

Within the top 25, the 12 fee-only firms grew their assets at a 28% rate, versus a 19% rate for the 13 hybrid firms.

See the gallery for Aite-Novarica’s top 25 RIAs.

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