Data & Research June 20, 2024

RIA Headcount Continues to Rise

Registered investment adviser headcount and assets hit another record in 2023, according to the Investment Adviser Association and COMPLY.

Reported by

The registered investment adviser sector appears to be booming by all metrics, according to data released Thursday in a joint report by the Investment Adviser Association and consultancy COMPLY.

The number of RIAs hit a record of 15,396 in 2023, up about 1.9%, and was the twelfth year in a row in which the number of advisers grew. It’s also the first year that non-clerical employees at advisories surpassed 1 million people, increasing 3.6% when compared to 2022.

Never miss a story — sign up for PLANADVISER newsletters to keep up on the latest retirement plan adviser news.

Assets under management for RIAs also grew by 12.6% year-over-year in 2023, matching a record high set in 2021 of $128.4 trillion. That came in part from a 3.7% increase in total clients by investment advisers in the year.

“Individual investors increasingly recognize the value of fiduciary advice as they seek to save and invest for retirement, home ownership, education, and other goals,” IAA President and CEO Karen Barr said in a statement with the report.

The report did note that the “industry is dynamic, with a significant number of advisers entering and exiting the industry each year,” though that is mostly among advisers managing less than $1 billion in assets.

In the past 6 years, over 24 million more people have engaged an investment adviser for asset management, a 12.8% per year growth rate, according to the report.

The IAA and Comply also noted the number of advisers exempt from Securities and Exchange Commission registration. In 2023, there were 5,390 exempt reporting advisers filing Form ADV with the SEC and 3,940 exempt reporting advisers filing Form ADV with state authorities, according to IAA and COMPLY. These advisers combined managed more than $6 trillion in private fund gross assets.

Regulatory decisions, some of which the IAA is seeking to influence through ongoing lobby efforts, may play a role in the growth among RIAs in 2024 and beyond, the report noted.

The association called out in particular the safeguarding proposal, which it has argued will unfairly force smaller advisers into more stringent custody requirements.

The report backed up the finding that most advisers are relatively small firms, with 92.7% employing 100 or fewer employees, and 69.3% of advisers managing less than $1 billion in assets.

The IAA is a trade association representing the interests of fiduciary investment adviser firms; COMPLY is a consultancy working with investment management firms.

Products June 20, 2024

Product & Service Launches – 6/20/24

State Street Global Advisors launches IncomeWise solution; BlackRock expands active ETF platform with 2 ETFs; Vanguard reopens actively managed funds to all investors; and more.

Reported by

State Street Global Advisors Launches IncomeWise Solution

State Street Global Advisors, the asset management business of State Street Corp., has introduced the latest iteration of its target-date funds offering IncomeWise. This solution aims to redefine retirement planning by integrating lifetime income features into a target date fund. 

IncomeWise is a traditional index-based TDF that allows participants to convert their savings into lifelong income. Participants can choose to transform a portion of their IncomeWise savings into a lifetime income stream that begins in later years through the purchase of a qualified longevity annuity contract.

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

Meanwhile, the participant’s remaining savings can support early retirement spending needs through a managed drawdown strategy, designed to complement the future QLAC payments. 

“State Street’s Global Retirement Reality Report consistently indicates that the majority of respondents seek flexible access to their savings early in retirement, alongside a defined income stream later in life,” Brendan Curran, U.S. head of defined contribution at State Street Global Advisors, said in a statement. “In response, our commingled IncomeWise solution offers participants the option for both early-stage and later-stage income sources, allowing participants to customize their drawdowns in retirement, for a balance between flexibility and security.”

BlackRock Expands Active ETF Platform With 2 ETFs

BlackRock announced the launch of the BlackRock Long-Term U.S. Equity ETF and the BlackRock High Yield ETF. According to BlackRock, these solutions will offer tax efficiency and alpha in the convenience of an ETF.

BlackRock has a track record of delivering alpha, with 93% and 79% of BlackRock’s actively managed taxable fixed income and fundamental equity AUM, respectively, outperforming the benchmark or peer median over the past five years.

“To generate compelling returns in public equities, we believe a long-term approach is required,” Alister Hibbert, head of BlackRock’s strategic equity team, said in a statement. “True business value is unlocked over years, not quarters; and companies that can deliver high returns over time are often undervalued by the market today. A high-conviction strategy like [BlackRock Long-Term U.S. Equity ETF] is essential to helping investors capture this significant alpha opportunity.”

BlackRock has nearly doubled its number of active ETFs in the past year, managing $25 billion in assets under management across 40 active ETFs in the U.S.

Vanguard Reopens 2 Actively Managed Funds to All Investors

Vanguard is reopening two actively managed stock mutual funds. On Tuesday, the firm announced that it would reopen its Primecap and Primecap Core, which have been closed off to new investors since 2004 and 2009, respectively. A third Primecap fund, Capital Opportunity, was also closed in 2004 and remains closed.

The two large-cap growth funds have reopened without restriction to all investors and will be available for all new accounts. Primecap had assets of $76.1 billion at the end of May, while Primecap Core had assets of $13.2 billion.

Vanguard routinely closes funds to new investors when it is in the best interest of shareholders, according to a spokesperson for the firm. One thing that the firm evaluates when doing so is whether the size of a fund could impact a manager’s ability to effectively generate alpha for investors.

“After careful consideration of the funds’ current investment capacity, Vanguard has determined that the funds have sufficient capacity to reopen to new accounts and additional purchases without limit,” the spokesperson said.

TIFIN Give and AssetMark Announce New Collaboration

TIFIN Give, a philanthropy platform serving families, employees and other cause-based communities, announced a strategic relationship with AssetMark, a wealth management platform provider.

TIFIN Give’s fund technology will be integrated into the AssetMark platform, providing a way for financial advisers and their clients to manage and optimize charitable contributions. AssetMark’s advisers will have access to tools that facilitate more effective philanthropic and tax planning across multiple generations of their clients and their families.

AssetMark clients will also have access to TIFIN Give’s donor-advised fund technology, which simplifies the process of setting up, managing and distributing charitable donations.

“We are excited to partner with AssetMark, a leader in the wealth management industry, to bring TIFIN Give’s digital-first donor-advised fund technology to their valued clients,” said Paul Lussow, CEO of TIFIN Give, said in a statement. “This relationship represents a significant step toward our shared mission of making philanthropy more accessible and impactful.”

«