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financial performance

RIA Trend Report - Financial Performance: Financial Summary

Advisors are optimistic about 2016. | Sponsored by Allianz Global Investors

The median advisor reports having $50 million of AUM and 129 clients, which implies an average account size of $388 thousand. Additionally, the median reported revenue amount of $427 thousand implies a median fee of approximately 86 bps. To calculate the median fee, we divided revenues by a calculated average AUM over the course of the year. Profit margins for 2015 are just under 35%, a level that is near the high when we compare to prior surveys.

Looking forward, advisors are optimistic about 2016. The median advisor expects to increase the number of clients by 7%, to 138, and to increase assets under management by nearly 27%, to $63 million. If those targets are achieved, the expected revenue growth of 10%, to $470 thousand, certainly looks reasonable. Expense growth is expected to lag revenue growth, but surprisingly, advisors aren’t translating the operating leverage into robust profit growth, which is expected to be just under 8%. Unfortunately, we do not have enough information to explain what factors might be pressuring margins in 2016.

Read Next: Assets Under Management

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