Number of RIAs Sets New Record: Report

The regulatory environment has also shifted, said Karen Barr, IAA's president and CEO, and Jamila Mayfield, Comply's chief regulatory services officer Wednesday, when their joint report was issued. "The focus at the SEC has changed considerably, with an emphasis on tailored regulation that encourages innovation and growth," Barr and Mayfield said, citing the SEC's proposal to modernize the definition of "small entity" for investment advisors under the Regulatory Flexibility Act.

Most SEC-registered advisors are small businesses. In 2025, 92.8% of SEC-registered advisors employed 100 or fewer people, according to the snapshot. Only 1.7% had a workforce of over 500 people, while the median investment advisor employed eight people.

AI, Digital Assets and Private Markets

While Form ADV Part 1 does not provide direct information on advisors' use of artificial intelligence, "it does give us a clear picture of industry employment — and the robust gains in 2025 suggest that AI has not had a significant impact on aggregate staffing to date," said Barr and Mayfield. "However, while total employment does not appear to be affected so far, the growth in AI is reportedly leading to changes within firms and shifts in hiring patterns."

Also, in 2025, only 100 advisors reported that they were investing in cryptocurrencies or digital assets directly, "though that was a three-fold increase from the previous year," the report points out. "As the regulations regarding investments in digital assets become clearer, we expect to see this number continue to rise," Barr and Mayfield said.

As to private markets, if the Labor Department's recently proposed guidance on how fiduciaries can determine whether a private market investment is an appropriate option for a defined contribution plan "are successful," Barr and Mayfield state they'd "expect to see changes in the allocation of assets in separately managed accounts."

There may also be "a shift in assets from registered investment companies, which are limited in their ability to invest in private markets, to collective investment trusts, which are included with 'other pooled vehicles' in Form ADV," Barr and Mayfield said.

This year's data "supports the general trend of more consumers relying upon investment advisers for financial advice," said Amy Lynch, founder and president of FrontLine Compliance, in an email Wednesday. "This is mainly due to the aging population in the USA as well as the distribution of wealth. Pensions are paying out more than they are taking in due to increased numbers of retirees."

Also, retail advisors "are in demand by this same population," Lynch continued. Both advisors and consumers "are interested in how digital assets can play a role in portfolios. The industry will continue to gain both customers and advisers as the population continues to age and the wealthy become even wealthier and then hand off that wealth to the next generation."

AUM Jump

Assets under management of SEC-registered investment advisors gained 22.3% in 2025, to reach a record high of $176.8 trillion, the report states.

Other notable stats, according to the report:

• New SEC registrants are likely to be small: in 2025, over 93% of new SEC registrants had less than $1 billion in assets under management.
• SEC-registered advisors in 2025 had median AUM of $446.9 million in 2025.

State-Registered Advisors

In 2025, there were 15,799 advisors registered with state authorities and 4,764 state exempt reporting advisors (ERAs) that file Form ADV.

The number of state-registered advisors declined by 1.5% in 2025, the report states. The decline appears to be at least partly the result of "the strong market environment making it easier for advisors to meet the minimum assets required for SEC registration," according to the report.

In both 2024 and 2025, the net number of advisors moving from state to SEC registration was approximately 500, after deducting the number of advisors moving from SEC to state registration.

As it stands now, advisors with at least $100 million in assets under management must register with the SEC, while smaller advisors register with the states.

Individual investors are the core business of state-registered advisors. In 2025, these advisors managed assets for over 714,000 individuals, located almost entirely in the United States, according to the report. Individual clients accounted for more than 97% of the advisors' total clients and over 90% of the advisors' $411.9 billion in assets under management, the report states.

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