Wednesday, 18 October 2017 10:36

AUM and Costs are Going the Wrong Way for RIAs

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(New York)

Despite good growth over the last few years, RIAs across the board are having trouble. While asset and revenue growth has slowed considerably (from 16% in 2013 to just 5% in 2016), costs have been going the other way. Salaries for senior advisors rose 23% between 2015-2017, and other admin staff have seen double digit gains as well. Regulatory costs have also risen substantially, all of which is leaving RIA firm owners increasingly squeezed. One of the big issues is that as Baby Boomers are retiring, assets are now starting to move out and firms are having trouble attracting new assets at the same pace.

FINSUM: It has been a stellar run for RIA firms, but demographics are starting to bite, as is the reality that the hiring market is short on advisors, which has pushed up pay.

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