Robos and Apps Behind Big Bump in Clients
Thanks to the proliferation of online tools, apps and automated advice, advisors registered with the SEC were able to boost client numbers by 22% since last year, according to a new study from the Investment Adviser Association and National Regulatory Services.
Federally registered investment advisors now oversee assets for more than 36.4 million clients – a 22.4% jump over 2015 – according to a study of all 11,847 investment advisors registered with the SEC as of April 8.
The study’s authors attribute the spike to the proliferation of automated advice offerings geared toward retirement plan participants and to the growing use of online and app-based financial account access tools. What’s more, 126 firms report that they deliver advice exclusively online – a 60% increase from the year prior, according to the study.
The study also found a robust industry despite volatile markets. The number of SEC-registered advisors grew 3.3% since last year and firms in the sector added 30,540 non-clerical jobs – a 4.1% rise over 2015, according to the study.
On the other hand, flat markets have contributed to a mere 0.2% increase in total regulatory assets under management, which now stand at $66.7 trillion, the survey found.
In addition, the number of firms with more than $100 billion in assets shrank for the first time in history, dropping from 128 in 2015 to 121, according to the study.
These giants still control 53.7% of the industry’s assets, the study found, but the bulk of the industry (72.3%) are firms with less than $1 billion. And while these sub-billion firms only managed 3.4% of total assets, they grew them by 2.5% from last year, according to the study.