Registered investment advisory firms’ assets under management are growing significantly, but they aren’t adding new clients at anywhere near the same rate, a new study said.
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Across more than 14,000 RIAs that were registered with the Securities and Exchange Commission in 2025 and 2026, the median firm boosted its AUM by 15% but increased its count of individual or institutional clients by just 2% — or one new customer, according to a study released last week by Paithos Research.
The research arm of financial advisor marketing and technology firm Paithos culled the data from SEC Form ADV filings tracking firms’ data over a 13-month period. While the correlation between stock and bond returns and wealth management AUM may not necessarily mean that the industry is failing to reel in new clients or assets, many experts say firms that don’t grow organically will fall behind the competition.
At Financial Planning’s request, report author Maxwell Andrew further spliced the data collection based on the industry’s most important base of retail individual or high net worth clients and firms that provide financial planning services. The median number of new individual or high net worth clients among the whole group was zero, but it came to a mere six for firms that had already listed one or more retail clients last year and seven for those with 10 or more.
And firms that provide financial planning services reaped a median 17% bump in AUM from last year, but only a 4% rise in new clients — or 10 new customer relationships in 13 months. Regardless of the fact that Form ADV data collection requires making choices that could shift the takeaway numbers, organic growth from incoming clients and assets represents a key factor to RIA valuations that separates firms that are adding them from those that aren’t.
“Across the full panel, 30.5% of firms reported higher AUM without a higher reported client count,” Andrew said in an email. “Form ADV has no flow data, so the filings can’t split that growth among market performance, net flows and acquisitions. The median firm’s reported AUM rose 14.5%. The S&P 500 returned 17.9% over the same period, and a simple 60/40 S&P/Bloomberg US Aggregate mix about 13.7%.”
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Big firms get bigger by reaping their advantage
As the Paithos study and others tracking the industry in recent years have shown, RIAs and wealth management firms in general are consolidating through M&A and the advantages of scale. Just 261 RIAs that have more than $100 billion in AUM have 72% of the total assets managed across the entire channel, the Paithos report showed.
When adding those with at least $1 billion in AUM to the group of RIAs with above $100 billion, the market share is nearly 98%. And the firms’ client growth displayed a positive relationship with size as well, with RIAs that have at least $10 billion in AUM adding new customers at around double the rate of their smaller peers. Those larger RIAs that are rapidly buying up smaller firms can devote more resources to prospective client leads through marketing efforts that yield organic growth.
That’s why Paithos and other industry marketers like Tim Fagan, founder and CEO of advisor marketing and technology firm Capital Turbine, specifically called out the report’s finding that RIAs with more than $10 billion in AUM are two times as likely as those with between $100 million and $1 billion to make use of compliant testimonials in their outreach. In an email, Fagan said that ignoring that opportunity “means potentially missing a layup for brand differentiation” among independent advisors. Although, he acknowledged that the differences between firms’ marketing techniques largely stem from the disparity in resources among large and small RIAs.
“Resource constraints have forced small and large firms to play very different ballgames,” Fagan said. “For years, the largest firms have had access to immense resources, including sophisticated marketing teams, large ad agencies and advanced ad technologies with seven-figure budget minimums. Conversely, for the last 10-15 years, a sub-$100 million AUM firm’s best options were: a) buying marketing templates used by thousands of their competitors, b) purchasing search and social ads at a significant markup from small agencies, or c) asking for referrals, which are naturally in very limited supply.”
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Stark data, but also vast potential
The Paithos data revealed how such tough, competitive fights for clients are playing out across RIAs. Out of the more than 14,000 RIAs of any size, a quarter lost retail or institutional clients, and another 20% reported the same number as a year ago. On the other side of the organic growth curve, 20% netted a spike of at least 15% to their client bases, including the 11% of RIAs that drew 30% more customers to their ranks. While M&A deals could always affect any Form ADV data, those numbers presented a stark picture of the RIA channel.
“Fiscal 2025 was, at the median, a one-client year,” Andrew wrote in the report. “Reported assets grew sharply, reported client counts barely moved and the top decile’s share of all reported clients rose from 80% to 82.5%. The interesting question, which one more filing season will begin to answer, is whether the divergence persists under different market conditions. It could narrow through faster reported client growth, slower asset growth, or both.”
Despite those findings, the onslaught of AI and other new technology could also alter that picture, according to Fagan. Tools available through, for example, Claude, Meta or Google Ads have “given every advisor a tier-one marketer at their disposal” at cheap rates, he noted.
“The historical data is definitely bleak for small firms, but I actually think this has the potential to change dramatically as AI levels the playing field,” Fagan said. “An independent advisor with a small budget, a smart strategy and a clear niche can now outcompete any large firm with a giant budget. This was not the case until very recently.”
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