U.S. Investment Advisers to Hit Record High of 15,114 in 2022, Despite Falling Assets Under Management for First Time Since 2008, According to Annual Report of the Association of Investment Advisers and National Regulatory Service, a Comply Affiliate bottom.
The country has added 308 fiduciary advisors, 2.1% more than last year, to meet the demand of those wanting to navigate a turbulent market, according to the annual Investment Advisers Industry Snapshot.. This report, in its third year, is based on investment advisory data filed with the Securities and Exchange Commission on Form ADV Part 1A.
“Investors are increasingly looking to investment advisors who act as fiduciaries to provide ongoing advice on how to manage their investments,” IAA CEO and Chairman Karen Barr said in a statement. Stated. “Over the last five years, more than 22 million individuals have turned to investment advisors to manage their wealth. Both the number of individual clients and their wealth are growing at an annual rate of approximately 12%.”
This growth was seen even though assets under management fell 11.1% due to market conditions, marking the third decline in the past 22 years. Other declines occurred during the 2008 financial crisis and the 2002 tech bubble burst. 401(k) accounts have also been hit by the market decline, with retirement plan firm Aright reporting a 14.7% decline in median returns for investors in defined contribution plans last year. .
The investment advisory firm managed $114.1 trillion in total assets for 61.9 million clients last year. The number of customers using wealth management services rose 2.1% to 54.3 million, a record high. According to the IAA and Comply, the total number of clients, including clients using financial planning services, fell 4.3% as digital advice services evolved.
Although the investment advisory industry is growing overall, it continues to experience significant turnover, with 834 firms deregistering from the SEC, according to the report. Sales were concentrated in advisors with less than $1 billion in assets.
Last year, 88.5% of advisors had less than $5 billion in assets under management, and more than half between $100 million and $1 billion, according to the report.
The groups also noted the impact of the SEC’s newly introduced marketing rule, which regulators continued to expand and clarify earlier this month. Nearly 40% of advisors included performance information in their ads in 2022 to comply with the rule, according to the report. However, the data collection is not comparable to 2021 as the data collection was from new questions in the filing.
Both the number of funds and the number of assets under management have continued to grow faster in private equity funds than in hedge funds for a decade, according to the report. Private equity funds in 2022 accounted for 44.2% of private fund numbers and his 32.8% of private fund assets.
“This year’s report highlights the diversity of the industry and its continued growth, particularly in terms of the number of companies and the number of private funds,” said John Gebauer, chief regulatory officer at Comply, in a statement. emphasized,” he said. “These trends are clearly affecting the SEC’s areas of focus for inspection and rulemaking, as evidenced by this year’s proposals aimed at increasing protections for private fund investors.”
These organizations noted that over the past 22 years, the growth in the number of SEC-registered advisers has been consistent with economic growth as measured by GDP. Growth in assets under management is influenced by stock market trends.