More RIAs are providing financial advice to more clients than ever, a new report found.

Nearly 13,000 investment advisors registered with the Securities and Exchange Commission (SEC) have reported roughly 43 million advisory clients in 2019, according to a joint study by the Investment Adviser Association and National Regulatory Services.

There are now 12,993 registered firms, up 3.3% from last year. These firms are serving nine million more clients than reported last year, which the report attributed, at least in part, to the increased popularity of robo-advisors.

'Two of the top five advisors as measured by number of non-high net worth individual clients served are digital advice platforms, representing 4.8 million clients,' the report said. 'These clients tend to have lower – and in some cases zero – account balances.'

Total assets under management climbed up to $83.7 trillion, up 1.4% from $82.5 trillion last year, ‘despite significant market declines in December 2018’, the report said.

The report also found strong job growth, with a record total of 835,124 non-clerical employees – up 3.7% from a year earlier and up 16% over the last five years. Of these employees, more than half provide investment advisory services, including research, indicating a 'healthy increase' of over 20,000 since 2018.

Asset-based fees continue to dominate in the investment advisory profession, the report said. In a slight increase over last year, 95.5% of advisors indicated they are compensated based on a percentage of their assets under management.

The number of advisors reporting charging fixed fees, likely due to 'generational turnover as younger investors may prefer an alternative model when paying for financial advice', the report said.

Advisors compensated through commissions fell to 3.2% in 2019, continuing a steep decline from 4.5% three years ago.

Industry barbell

The recent trend toward increased industry concentration continued this year, with a 'very small group of large advisors' overseeing a majority of all assets under management, the report said.

Despite accounting for only 1.1% of SEC-registered advisors, 148 firms managing over $100 billion collectively managed 59.7% of all reported assets under management, or $49.9 trillion.

At the other end of the spectrum, 71.5% of all advisors managed less than $1 billion and they collectively managed just 3.1% of all reported assets under management, or $2.6 trillion.