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Investment advisors in the U.S. - statistics & facts

Registered investment advisors (RIAs) are advisors registered with the U.S. Securities and Exchange Commission (SEC) or registered by the securities agency in a state. The role of the RIAs is to provide tailored financial advice to their clients, and manage their clients' investment portfolios. Generally, the clients of RIAs can be individuals, institutions, or pooled investment vehicles. The number of RIAs has been increasing annually, with there being almost 13,500 registered investment advisors employed in the United States in 2020. The value of their managed assets also grew over this time, but in recent years, however, competition has risen on the market: the robo-advisors. These “new competitors” are online platforms that base investments on algorithms with minimal human interaction. Although the value of assets under management (AUM) of robo-advisors in the United States is far below that of RIAs, the assets managed by robo-advisors are growing rapidly and is expected to more than double within five years.

Do investors prefer a human or robo-advisor?

The growth and popularity of robo-advisors is clear, which is understandable as they provide many benefits to investors: they are easy to use, cost-effective, and have a low-entry barrier, just to name a few. The popularity of robo-advisors, however, is more common among younger generations, while many investors would not even consider working with a robo-advisor. The main reason why most investors in the United States still, as of 2021, prefer to work with a human advisor is that they want to be able to discuss their investment with an actual person – a criteria that robo-advisors will never be able to meet.

What does the typical investment advisor look like?

Most of the RIAs in the United States are smaller in size, managing assets between 100 million and one billion U.S. dollars. The most provided services are investment-management strategies, and planning and maximizing retirement income. Most of the clients are individuals; more specifically non-high net worth individuals. Despite this, the largest share of the AUM comes from pooled investment vehicles, not individuals. Primarily, the typical robo-advisor serves the clients with the same financial questions as the RIAs: recommendations on where to place extra money, and planning and help for how to achieve a financial goal. The average AUM of clients of robo-advisors in the United States reached more than 87,000 U.S. dollars per user in 2020.

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Investment advisors in the United States

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Investment advisors in the U.S. - statistics & facts

Registered investment advisors (RIAs) are advisors registered with the U.S. Securities and Exchange Commission (SEC) or registered by the securities agency in a state. The role of the RIAs is to provide tailored financial advice to their clients, and manage their clients' investment portfolios. Generally, the clients of RIAs can be individuals, institutions, or pooled investment vehicles. The number of RIAs has been increasing annually, with there being almost 13,500 registered investment advisors employed in the United States in 2020. The value of their managed assets also grew over this time, but in recent years, however, competition has risen on the market: the robo-advisors. These “new competitors” are online platforms that base investments on algorithms with minimal human interaction. Although the value of assets under management (AUM) of robo-advisors in the United States is far below that of RIAs, the assets managed by robo-advisors are growing rapidly and is expected to more than double within five years.

Do investors prefer a human or robo-advisor?

The growth and popularity of robo-advisors is clear, which is understandable as they provide many benefits to investors: they are easy to use, cost-effective, and have a low-entry barrier, just to name a few. The popularity of robo-advisors, however, is more common among younger generations, while many investors would not even consider working with a robo-advisor. The main reason why most investors in the United States still, as of 2021, prefer to work with a human advisor is that they want to be able to discuss their investment with an actual person – a criteria that robo-advisors will never be able to meet.

What does the typical investment advisor look like?

Most of the RIAs in the United States are smaller in size, managing assets between 100 million and one billion U.S. dollars. The most provided services are investment-management strategies, and planning and maximizing retirement income. Most of the clients are individuals; more specifically non-high net worth individuals. Despite this, the largest share of the AUM comes from pooled investment vehicles, not individuals. Primarily, the typical robo-advisor serves the clients with the same financial questions as the RIAs: recommendations on where to place extra money, and planning and help for how to achieve a financial goal. The average AUM of clients of robo-advisors in the United States reached more than 87,000 U.S. dollars per user in 2020.

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