According to Meridian-IQ, the total number of registered investment adviser (RIA) firms grew by approximately 3.1% in the 12 month period ending in May 2015. As of May 2015, Meridian-IQ estimates that there are 32,736 RIA firms actively registered compared to 31,739 firms in May 2014 (a net increase of 997 firms). This compares to a net increase of 744 RIA firms from May 2013 to May 2014 equating to a 2.4% increase in the total number of firms. Thus, there was an acceleration in the growth of the total number of RIA firms in the last 12 months compared to the previous period.
The largest states are also home to a significant portion of all RIA firms. In 2015, the top 5 largest states by number of RIA firms (including both state and SEC-registered firms) are:
|State||Number of RIA Firms (2015)|
|2) New York||3,465|
Comparing 2015 to 2014, the top 5 states remained unchanged, staying consistent throughout the past 12 months. California, New York, Texas, Massachusetts, and Florida continue to be the standouts in regards to total number of investment advisory firms located in a state
Looking at the top states in terms of RIA firms per person, one would expect the largest states to be home to a significant percentage of the total number of investment advisory firms. However, this is not always the case when looking at the top states in terms of population density. Population density is measured as the number of individuals per RIA firm in a given state. Utilizing data from the United States Census Bureau the top 5 most dense states in terms of number of firms in 2015 are:
|State||Number of RIA Firms (2015)||Est. Population||Population Density (Residents Per RIA Firm)|
|3) New York||3,465||19,254,630||5,557|
|5) New Hampshire||183||1,309,940||7,158|
Interestingly enough, despite large numbers of investment advisory firms, both Florida and Texas, have relatively low density figures. Florida currently has 1 firm per every 13,187 people and Texas has 1 firm per every 12,212 people. Of course, density is not a perfect measure as a good portion of the investment advisory firms in a given state also service clients out of state.
Another way to look at investment advisory firm density is geographically. Instead of looking at how many RIAs are available per resident, we can see how many RIA firms are available in a state per square mile. In 2015, the top states in geographic density are:
|State||Number of RIA Firms (2015)||Square Miles||Geographic Density (sq. Land Miles Per RIA)|
|3) New Jersey||904||7,419||8|
|4) Rhode Island||89||1,045||12|
According to Meridian-IQ, in the 12 month period concluding at the end of May 2015, 2,241 new advisory firms were started. We believe the growth of the RIA industry will only accelerate as more advisers and clients recognize the benefits of the investment adviser model.