How Many RIA Firms Are There in the US?

Defining Registered Investment Advisers

Registered Investment Advisers (RIAs) are financial professionals or firms that provide personalized investment advice to clients. A distinguishing characteristic of RIAs is their fiduciary duty, which legally obligates them to act in their clients’ best interests at all times. This standard means RIAs must prioritize their clients’ financial well-being above their own or their firm’s interests, a higher standard compared to other financial professionals who may operate under a suitability standard.

The regulatory oversight for RIAs in the United States operates on two primary levels, influencing how these firms register and operate. The specific level of regulation depends largely on their Assets Under Management (AUM), which is the total market value of financial assets an adviser manages for clients.

Firms with substantial AUM typically fall under the purview of the Securities and Exchange Commission (SEC). An investment adviser must register with the SEC if it manages $100 million or more in client assets. This federal oversight applies to larger firms, ensuring compliance with federal securities laws and regulations.

Conversely, investment advisers managing less than $100 million in AUM usually register and are regulated at the state level. Each state has its own securities regulator responsible for overseeing these smaller firms. This dual regulatory structure ensures appropriate oversight, tailored to their size and scope of operations.

The Current Count of RIA Firms in the US

As of early 2024, the financial advisory industry reports approximately 15,396 active Registered Investment Adviser (RIA) firms operating across the nation. This figure represents the collective total of firms registered at both the federal and state levels.

About 13,880 firms are registered with the Securities and Exchange Commission (SEC), indicating they manage $100 million or more in client assets. These SEC-registered firms collectively oversee a significant portion of the nation’s investment capital, managing an estimated $114.1 trillion in Assets Under Management (AUM).

The remaining RIA firms are registered at the state level, typically managing less than $100 million in AUM. While specific aggregate numbers for state-registered firms can vary, they constitute a substantial segment of the overall RIA population. The Investment Adviser Public Disclosure (IAPD) database, which is part of the Central Registration Depository (CRD) system maintained by FINRA, serves as the primary public source for information on both SEC and state-registered investment advisers.

RIA firms vary considerably in size, from small, independent practices serving a limited number of local clients to large, multi-state operations. Many firms manage less than $1 billion, while a smaller percentage manages assets in the tens or hundreds of billions. This broad range of firm sizes reflects the varied needs of investors and diverse business models.

Historical Trends and Influencing Factors

Over the past two decades, the number of Registered Investment Adviser firms in the United States has shown a consistent upward trend. Since 2004, the total number of RIA firms has increased by over 40%, indicating a sustained period of growth and expansion.

One of the most significant factors driving this growth is the increasing preference for fee-based financial advice over traditional commission-based models. Investors are increasingly seeking advisers who operate under a fiduciary standard, where compensation is directly tied to the assets managed rather than product sales. This alignment of interests has resonated with a growing segment of the investing public.

Regulatory changes have also played a role in shaping the RIA landscape. Legislation such as the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 introduced provisions that impacted the oversight of investment advisers, including adjustments to the AUM thresholds for SEC versus state registration. These regulatory refinements reinforced the importance of the fiduciary standard and transparency within the advisory sector.

Technological advancements have further fueled the proliferation of RIA firms by lowering barriers to entry for new advisers. Digital tools for portfolio management, client communication, and compliance have become more accessible and affordable, enabling smaller firms to operate efficiently without extensive infrastructure. This has fostered innovation and allowed independent advisers to compete more effectively with larger institutions.

Demographic shifts within the United States have also contributed to the rising demand for financial planning and wealth management services. As the baby boomer generation enters retirement and younger generations accumulate wealth, the need for personalized investment advice, retirement planning, and estate planning has surged. This sustained demand provides a fertile ground for the continued growth and establishment of new RIA firms across the country.