What You Need to Know
- AUM grew 16.7% to a record high of $128.4 trillion in 2021, and assets have increased in 18 of the past 21 years.
- Some 92.5% of industry assets were managed by firms with AUM over $5 billion last year.
- The strongest growth in the number of advisor firms in 2021 was in the South, especially Florida.
The number of investment advisors registered with the Securities and Exchange Commission, the number of clients they served, the assets they managed and the number of people they employed all reached record highs in 2021, according to a report released Thursday by the Investment Adviser Association and National Regulatory Services.
In 2021, the number of SEC-registered investment advisory firms increased 6.7% from 2020 to 14,806 firms, an increase of 926 firms, according to the report. The number of SEC-registered firms has increased in 19 of the last 21 years, the report said.
Registrations declined only in 2010 and 2011, when the minimum size threshold for SEC registration grew to $100 million in AUM from $25 million, the report noted.
The vast majority of advisors (88.1%) worked in smaller firms in 2021, with 50 employees or less, according to the report.
Meanwhile, assets under management by SEC-registered firms grew 16.7% to a record high of $128.4 trillion in 2021. Industry assets have increased in 18 of the past 21 years, declining only in 2002 and 2008 because of market conditions, according to the report.
As in prior years, almost all assets were managed on a discretionary basis (91.5% in 2021), the report said.
The number of clients served by SEC-registered advisors grew 6.4%, reaching a record high of 64.7 million clients, including 53 million asset management clients. Meanwhile, 59.8% of advisers provided asset management services for individuals, the report said.
While 87.9% of the SEC-registered advisors had under $5 billion in AUM, 92.5% of industry assets were managed by firms with AUM over $5 billion, according to the report.