Not surprisingly, New York and California house the largest populations of registered investment advisors, according to the 2014 Evolution Revolution report released by NRS and the Investment Adviser Association. While the states' position in the rankings didn't change from last year's report, the number of advisors in each state (excluding Connecticut) increased, proving that advisors are still attracted to characteristics offered by these top locations.
The study found that access to financial markets, population and net worth were critical factors that influenced the number of advisors located in each state. For example, New York's top spot can be largely attributed to Manhattan's position as a major world financial hub, while New Jersey and Connecticut make the cut in part because of their close proximity to this metro hub. California and Illinois get a boost as the homes to secondary financial hubs in Los Angeles, San Francisco and Chicago.
Meanwhile Massachusetts claims the fourth spot on the list, not because of its population density, but rather the high average household net worth found in this state. It's also home to many advisors operating in the mutual fund industry. Similarly, Connecticut's ranking is also helped by the large concentration of hedge funds in the Greenwich and Stanford areas.
Note: The states' populations listed are based on 2010 data while the average household net worth per state is based off 2007 data.Start slideshow