Average Assets Under Management (AUM) for Financial Advisors

Increasing assets under management (AUM) is a priority for many advisors who want to scale their businesses. If that describes you, you might be curious about the average AUM for a financial advisor, and how your firm compares. Here’s a closer look at how the numbers break down and what they mean for your business.

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What Is the Average AUM for a Financial Advisor?

A typical advisor has $305 million in AUM, according to an analysis of SEC data conducted by the Investment Adviser Association (IAA). A “typical” advisor also has seven employees, and manages assets for:

• 363 individual clients
• 14 institutional clients
• 2 mutual funds, private funds or pooled vehicles

Advisors focused exclusively on individuals as clients were more likely to operate smaller firms. According to the IAA, on average, these firms have nine employees, two offices and $365 million in AUM.

The IAA’s analysis reviewed data from 15,396 advisors registered with the Securities and Exchange Commission. Collectively, these advisors managed $128.4 trillion in assets for 64.1 million clients in 2024.

Here are some additional takeaways from the study concerning advisor AUM:

• The 64.1 million clients using advisory services in 2023 represent a 3.5% gain over the previous year.
• The number of clients using asset management services increased by 4.4% to a record high of 56.7 million.
• Over two-thirds of advisors manage less than $1 billion in assets.
• Nearly 90% manage less than $5 billion in assets.
• Advisers with less than $1 billion in AUM accounted for almost all (93.6%) new SEC registrations in 2023.
• AUM increased by 12.6% from the previous year, and over the past 23 years, AUM has increased by 8.4% per year on average.
• Almost all assets, 91.4%, were managed on a discretionary basis.
• The 207 largest firms manage 66.1% of all AUM.
• Twenty-three firms moved into the $100 billion AUM category; none were new registrants.

So, what can we take away from this data? We can see that while smaller firms make up the lion’s share of new SEC registrations, the largest firms tend to see the strongest asset growth.

What Is a Good Financial Advisor AUM?

A “good” AUM is subjective, and the answer is different for every advisor. What’s good for your firm can depend on the following factors:

• How many clients you serve
• The number of employees you have
• Your geographic location and the market you’re in
• Which client niche you target
• The range of services you offer

It’s easy to assume that a higher AUM equals a better, more successful firm, but more it’s important to maintain perspective. Higher AUM suggests the potential for greater profitability, but it can also bring greater pressures to perform, attract new clients or retain the ones that you have.

How to Increase AUM As an Advisor

If you have a specific AUM in mind but you aren’t there yet, consider the steps you can take to increase that number.

The following are some of the most effective ways advisors can boost AUM:

• Engage. Sometimes increasing AUM is as simple as talking to your clients. For instance, they may have assets held away of which you were not aware. You might offer to review that segment of their portfolio, which is an opportunity to bring them under your management.
• Seek out high-net-worth clients. Adding more HNW or ultra-high-net-worth clients to your roster could lead to a substantial increase in AUM overnight. The key is knowing how to attract affluent clients to your business and deliver the level of service and type of advice they expect.
• Encourage referrals. Referrals can be an excellent tool for growth if you have a steady influx of new prospects entering your sales pipeline. Some of the best referral sources for advisors include your existing clients and other professionals in your network. Delivering superior service, implementing a referral program and cultivating spheres of influence are all ways to increase your referral rates.
• Expand your offerings. Creating a new offering can help you attract more clients or encourage your existing clients to bring more assets under your management. Before you move ahead with this strategy, consider what services you’re not offering now that your clients would find valuable. Then weigh the cost to implement those new services against the expected ROI to determine if it makes financial sense to do so.
• Grow your team. Developing the right team could help you attract more clients and increase AUM if you’re adding advisors with specialized expertise or skills to your roster. Consider what gaps you want to fill with your firm’s services and which type of candidate may be best suited to meet those needs. That can help you develop a strong advisor job description so you can attract the right candidates.

Frequently Asked Questions (FAQs)

Can You Start an Advisory Firm With No Assets Under Management?

It’s possible to launch a brand new advisory firm with zero AUM, though it’s typically not the easiest path to take. You may have to work a little harder to find and attract your first clients, which is where a solid financial advisor marketing plan comes into play. Setting some realistic goals for growing AUM in your first year and beyond can help you develop a winning client acquisition strategy.

What Is a Reasonable AUM Fee?

A typical financial advisor fee is 1% of AUM. That’s more or less the industry standard, though some advisors may charge more while others charge less. When setting your fees, it’s important to consider what’s competitive based on where you are in the market landscape, and what your ideal clients are likely to expect.

Why Do Advisors Lose Clients and AUM?

Clients leave their advisors for a variety of reasons, including poor communication, underwhelming performance and high fees. Losing a client can shrink your AUM, and it’s important to be proactive in retaining your client base. Delivering top-tier service is a must, and the most successful advisors understand the importance of encouraging engagement and showing client appreciation.

Bottom Line

Researching the average financial advisor AUM can give you a framework for goal setting as you plan your firm’s growth. One thing to keep in mind is that AUM alone doesn’t tell the whole story of a firm’s success; only you can define what that looks like for your business.

Tips for Growing Your Advisory Business

• How effective is your marketing strategy? If you’re not getting the results you’d like, it may be time to consider a strategic partnership to power your firm’s growth. SmartAsset AMP uses a holistic approach to help advisors connect with leads. Schedule a demo to learn how you can leverage this digital marketing platform to increase your AUM.
• Buying a book of business is another strategy you might use to increase AUM. One of the biggest challenges is determining an appropriate valuation for a book of business that’s for sale. Before you buy, it’s important to understand what you’ll pay and your expected ROI.

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