American investment advisors managed assets worth US$54.8 trillion as of April 2013, an increase of nearly 11% from the US$49.4 trillion reported in July 2012, according to new research by the Investment Adviser Association and National Regulatory Services (NRS).
The total number of SEC-registered investment advisers increased only slightly, from 10,511 in July 2012 to 10,533 in April 2013. This follows a significant decrease from 11,539 in 2011.
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According to the study report, the so-called "switch" in the Dodd-Frank Act resulted in more than 2,000 SEC-registered advisers switching to state registration and regulation.
At the same time, provisions of the Dodd-Frank Act requiring the registration of certain ‘private fund advisers’ under the Investment Advisers Act have resulted in the addition of more than 1,500 newly registered investment advisory firms, the study found.
"Our 2013 report shows that the investment advisory profession is alive and well, with SEC-registered firms employing more than 700,000 professionals and serving more than 25 million individual and institutional clients," stated John Gebauer, managing director of NRS.
"Owing to expansions in the SEC’s data collection activities, we now have even more information about the investment advisory profession. For example, the SEC is collecting more data about private fund advisers than ever before. Private funds have become a mainstream component of the investment advisory profession."
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By GlobalDataOther key findings of the report include that:
- Private funds: More than one-third of all SEC-registered advisors (38.1%) reported that they manage at least one private fund, with a total of 26,752 private funds with collective regulatory assets under management of $8.5 trillion – up from $8.1 trillion in July 2012.
- Hedge Funds: Of all reported private funds, hedge funds make up 40.8%, while private equity funds account for 32.5%.
- Client assets: 4,530 SEC-registered investment advisers (43%) reported that they or a related person had custody of client assets.
- Custodian status: Less than 1% of advisors reported acting as a qualified custodian in connection with their advisory services.
