Page 10 - Investment Advisor October 2022

EDITOR’S NOTE

By Janet Levaux

What a Growth Track!

e’re pleased to present the cover story for this “Thus, organizations have been looking at ways to serve
month’s issue, which focuses on RIA trends — more clients with the human resources they have. And many
W from the wave of dealmaking to other ways RIAs are finding that the best solution is to transition clients from
are expanding their practices via organic-growth strategies. busy primary advisors to advisors who have excess capac-
The latest tally of Securities and Exchange Commission- ity. Firms often have a hard time moving forward with client
registered investment advisory firms jumped about 7% last transfers, though,” Herbers said. Her latest column offers sev-
year — or by 926 firms from 2020 — to 14,806 firms, accord- eral helpful guidelines on how to do so successfully.
ing to the Investment Adviser Association and National In her latest The Playing Field column, Washington Bureau
Regulatory Services. Chief Melanie Waddell
While nearly 88% of The latest tally of SEC-registered SEC looks at likely rule-
the SEC-registered advi- makings this year by the
sors had under $5 billion investment advisory firms jumped about SEC that aim to rein in
in assets under manage- 7% last year — or by 926 firms from 12b-1 fees as well as cus-
ment, 92.5% of industry tody rule infractions. “The
assets were managed by 2020 — to 14,806 firms, according to custody rule process is
firms with AUM over $5 the Investment Adviser Association and well underway,” Barr said
billion, according to the recently in an interview
report. Asset growth has National Regulatory Services. with Waddell. “It’s not
been strongest for advi- unrealistic” that the agen-
sors with over $100 billion in AUM. In each of the past eight cy could put forth a rule in late October or November.”
years, the number of SEC-registered advisors has increased, “Fund fees have been on the SEC’s regulatory agenda for quite
while the number of brokerage firms has declined. some time now,” Amy Lynch, founder and principal of FrontLine
“The results of the [IAA and NRS’] 2022 Snapshot confirm Compliance, noted in a separate interview. “As you know, Rule
[that] investors recognize the value of fiduciary advice in 12b-1 fees have been dealt with rather harshly via the numerous
helping them meet their financial goals, whether planning for enforcement actions against funds. The industry has certainly
retirement, saving for homeownership or funding an educa- received the message and the use of 12b-1 fees is declining.”
tion. With the vast majority of firms employing 50 or fewer At the same time, though, “other fees such as revenue
people, it’s clear small businesses serving individual investors sharing are increasing. The key for funds is to provide clear
are the backbone of the investment adviser community,” said and consistent disclosure to shareholders regarding the fees
Karen Barr, IAA CEO and president. charged. I suspect any rulemaking that comes out to focus on
Also in this month’s issue, industry consultant and The Fast descriptive disclosures,” Lynch explained.
Track columnist Angie Herbers looks at the shortage of finan-
cial advisors. “Asked to name their top business challenge, firm
after firm will point to the difficulty of recruiting, training and
retaining talent. Amid the human resources crunch, advisory
firms continue to grow. To accommodate that growth, they
need more advisors — who are in short supply,” she explained. GROUP EDITOR-IN-CHIEF

8 INVESTMENT ADVISOR OCTOBER 2022 | ThinkAdvisor.com