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How many wealth managers are there in the US?

 

How many wealth managers are there in the US?

Introduction:

How many wealth managers are there in the United States? This question is one that can be answered by looking at the number of registered estate planning professionals and their assets under management. The answer to this question does vary from state to state, but overall, it's estimated that there are about 45,000 wealth managers employed throughout the United States.

There are roughly 13,000 wealth management firms in the United States, according to a report from Aite Group. This includes both independent broker-dealers (IBD) as well as licensed representatives (LRI). Both of these numbers represent a significant decrease compared to the 92,490 financial advisors that worked in this sector four years ago.

How many wealth managers are there in the US?

The United States has approximately 18,000 wealth managers. In addition to those licensed by the NFA or FINRA and registered as investment advisors with the SEC, many others are not regulated by a regulatory body and instead rely upon lawyer-client privilege. The NFA reports that a majority of these “unregulated” wealth managers were self-employed as independent contractors or proprietors.

The NFA also reports that the number of registered investment advisors (RIAs) grew by 2.6 percent from 2011 to 2012, according to the Investment Adviser Association (IAA), which represents RIAs across all three platforms: RIAs registered with the SEC; RIAs registered with an independent regulatory organization, and RIAs affiliated with colleges and universities offering RIA programs through accreditation programs.

The number of wealth management firms in the U.S. is estimated to be around 6,000. This figure includes both independent and commission-based financial advisors, as well as limited liability companies (LLCs) that provide estate planning and other services to high-net-worth individuals.

The vast majority of wealth managers are independent financial advisors. According to a recent report from Morningstar, only about 7% of registered investment advisors (RIAs) are self-employed or work for third-party firms. In addition, almost all RIAs receive commissions from their clients’ mutual funds or brokerage accounts—and most RIAs take advantage of this commission by selling more products than they would otherwise need to make up for lost earnings due to higher fees imposed by their clients’ brokerages. The result is an extremely lucrative business opportunity for many RIAs who do not have the time or expertise needed to manage large amounts of client assets on their own.

Most wealth managers work at full-service brokerages or banks with extensive sales forces designed specifically to recruit wealthy clients with large portfolios who are in need of qualified investment advice and guidance on estate planning matters such as wills and trusts.

There are more than 100,000 wealth managers in the United States and Canada.

The majority of wealth managers are self-employed or work for other firms.

There were about 5,500 registered investment advisors (RIAs) who reported an average of $2.3 million in assets under management (AUM) per firm at the end of 2010, according to a survey by AICoI.

The number of RIAs increased by 30 percent from 2009 to 2010, according to AICoI.

Conclusion:

According to the latest statistics, there were more than six thousand private wealth managers and 91,000 investment advisers in the United States as of 2012. It is projected that by 2020 the number of wealth managers will rise to over eight thousand while the number of investment advisers will drop to 83,000. However, there is a downside; this dramatic jump in the number of wealth managers means that there will be a decreased demand for investment advisors. The job market is actually fast-paced now and technology is replacing people faster than ever.

Overall, wealth managers are in-demand professionals. This may explain why there are so many wealth advisors in the US. But as the economy continues to improve and people start to look at ways to grow their assets, the need for wealth advisors will likely increase substantially. More businesses are also hiring more financial advisors, so it's worth it to keep an eye out for investment opportunities that could lead to the job of your dreams.

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