The number of registered investment advisors (RIAs) in the United States rose 3.1 percent in the 12-month period ending May 31 to 32,736 firms. That’s according to a survey published by the consulting and analytics firm Meridian-IQ.
There was a net increase of 997 RIAS during the period compared with the previous year. In 2013-2014, the number of RIAs rose 2.4 percent over the prior year, to 31,739 RIAs.
The survey found the top five states for the number of RIA firms in the year ended May 31 remained as follows: California, with 4,735 RIAs; New York, with 3,465 RIAs; Texas, with 1,872 RIAs; Massachusetts, with 1,353 RIAs, and Florida, with 1,349 RIAs.
In terms of population density - or the number of RIAs per person - Connecticut, Massachusetts, New York, Colorado and New Hampshire lead the nation.
Connecticut had one RIA for every 3,989 people and New Hampshire had one RIA for every 7,158 people, the survey also found.
In Meridian-IQ’s survey from last year, the top states with the fastest-growing number of RIAs were Hawaii, Utah, Nevada, New Mexico and Idaho.
By the end of May2014, Hawaii had 73 RIAs, a 40.4 percent increase over the previous year.
Utah, with 243 RIAs, saw growth rise by 25.9 percent. Nevada, with 170 RIAs, notched a 22.3 percent increase. New Mexico, with 88 RIAs, saw growth jump 18.9 percent. Idaho, also with 88 RIAs, saw its number of RIAs rise by 17.3 percent.
Industry experts point to the rise in equity markets since the financial crisis and better access to technology infrastructure as reasons for the increase in RIAs. By many measures, RIAs represent the fastest growing retail financial services distribution channel.
RIAs also say they value the independence that comes with forming their own advisories as this structure can better serve clients.
In a December 2013 report published by Cerulli Associates, the number of RIAs grew at an annualized rate of 8 percent over the eight-year period from 2004-2012, while every other distribution category dropped.
“RIAs are the sole growth story in a shrinking industry,” the report said.
RIAs compete for wealth with wirehouses, regional broker/dealers and advisors, independent brokers and advisors, and banks.
Data show that RIAs around the country manage more than $1.4 trillion in assets, according to The Advisor Center, an online research site for advisors.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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