All About RIAs in 2018

The number of federally registered investment advisors and the assets they manage continues to jump, with the number of SEC-registered advisors reaching 12,578, an increase of 406 advisors (or 3.3%) since last year, according to a just-released annual Investment Adviser Association poll.

SEC-registered advisors’ AUM now stands at $82.5 trillion, a 16.7% increase from $70.7 trillion in 2017, the largest percentage increase since 2014, according to the 2018 Evolution Revolution report, which is conducted by IAA and National Regulatory Services and provides a snapshot of the SEC-registered advisor universe.

“This year’s data demonstrates dramatically that the investment advisor profession remains dynamic, robust and critically important to investors and the capital markets,” said Karen Barr, IAA’s president and CEO, in releasing the report. “And investment advisors remain a powerful provider of high-quality jobs to the economy, including in small businesses.”

The report found that investment advisors managing more than $100 billion in regulatory assets under management grew at a faster pace than smaller advisors in terms of both number of firms and AUM.

Private equity funds make up 38.5% of all reported private funds while hedge funds represent 31.7%.

In 2018, advisors reported “1,104 additional private equity funds but a loss of 200 reported hedge funds,” the report notes.

The report also includes new Form ADV reporting stats on RIAs’ business practices, including how they invest separately managed accounts and their use of leverage and derivatives, which firms were required to report starting on Oct. 1, 2017.

Form ADV data showed 69.1% of reporting advisors have assets for separately managed accounts while only 12.2% of advisors engage in derivative transactions on behalf of any of the SMA clients.