Survey Shows Investment Adviser Sector Continues Growth

Michael Madden, Contributing Editor & Research Analyst, Wealth Solutions Report

IAA And COMPLY Publish Annual Investment Adviser Snapshot Revealing Growth Plus Key Trends In Remote Work, Regulation And Private Funds

The Investment Adviser Association (IAA) and COMPLY subsidiary National Regulatory Services jointly published the annual “Investment Adviser Industry Snapshot” survey of investment advisers, revealing a record number of both advisers and support staff. Key findings include that the sector grew by 2.1% in 2022, with 15,114 fiduciary investment advisers serving 61.9 million clients with $114.1 trillion in assets.

The numbers of both advisers and non-clerical employees rose to a record high, although assets under management declined for the first time since 2008.

Karen Barr, CEO & President, Investment Adviser Association

The survey found that most advisers are small businesses, with 91.7% employing 100 or fewer persons, 70.2% managing less than $1 billion in client assets, and advisers under $1 billion accounting for almost all new SEC registrations.

Karen Barr, CEO and President of the IAA, said, “Investors are increasingly engaging investment advisers, which continuously provide investment management advice as fiduciaries, putting their clients’ interests ahead of their own. Over the past five years, over 22 million more individuals have engaged an investment adviser for asset management – a rate of growth in both the number of individual clients and assets of roughly 12% per year.”

John Gebauer, Chief Regulatory Officer, COMPLY

The report highlighted several key themes, including regulatory uncertainty, especially regarding the “safeguarding proposal,” which would significantly increase custody regulations and cause a third of advisers to fall under custody requirements; an increase in remote and hybrid work as the number of offices in private residences rose by 25.6%; and the rise of private equity over hedge funds, since private equity funds now constitute 44.2% of private funds and hold 32.8% of private fund assets.

John Gebauer, COMPLY’s Chief Regulatory Officer, said, “This year’s report underscores the diverse nature of the industry and its continued growth, most notably in terms of the number of firms and the number of private funds. These trends are clearly having an impact on the SEC’s focus areas for examinations and rulemaking, as evidenced by the proposals made this year which aim to increase protections for private fund investors.”

COMPLY appointed Gayle Nixon as CMO in May. In April, the firm released its 2023 Chief Compliance Officer playbook. It hosts the annual ComplyConnect Conference & Expo and in 2022 announced its inaugural ComplyConnect Awards.

Michael Madden, Contributing Editor & Research Analyst at Wealth Solutions Report, can be reached at mmadden@wealthsolutionsreport.com.

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