Registered investment advisers entered 2026 with substantially larger asset bases but only marginally broader client rosters, underscoring a growing divide between financial expansion and organic business development across the independent wealth-management industry.

The median SEC-registered RIA increased regulatory assets under management by 14.5% during fiscal 2025, while its reported client count rose 2.1%, according to the inaugural RIA Signals Report published by Paithos Research. Expressed as an absolute change, the median firm added one net reported client during the year.

The findings were highlighted by InvestmentNews on July 31 and were based on public Form ADV Part 1A filings. Paithos examined firms that submitted annual amendments during both the 2025 and 2026 filing seasons, producing a continuing-firm panel of 14,768 advisers. The headline analysis covered 14,086 firms with usable paired data for both regulatory assets and reported clients.

The contrast is significant because asset growth and client growth represent different components of an advisory business. Assets can rise through investment performance, additional money from existing clients, newly acquired relationships, mergers or changes in regulatory reporting. Client-count growth, although also subject to reporting limitations, provides a separate indication of whether firms are expanding the number of relationships they serve.

Paithos did not attempt to attribute the 14.5% median asset increase to any one source. Form ADV does not disclose the flows needed to distinguish investment returns from net new assets or acquired assets. The report therefore stopped short of describing the increase as organic growth or investment performance.

Market conditions nevertheless provided important context. The S&P 500 generated a total return of 17.9% in 2025, exceeding the median RIA asset-growth rate. A simplified portfolio consisting of 60% in the S&P 500 and 40% in the Bloomberg U.S. Aggregate Bond Index would have returned approximately 13.7%, according to the report. Neither comparison represents the actual allocation of a typical RIA portfolio, but together they indicate that much of the recorded asset expansion was numerically consistent with a strong year for diversified financial markets.

The industry’s aggregate figures were also substantial. Across the paired panel, reported assets increased from $137.4 trillion to $159.1 trillion, or 15.8%, while aggregate client counts rose 5.8%. The broader current-filer universe identified by Paithos included 17,543 firms reporting $178.03 trillion in regulatory assets, although the researcher noted that a trailing filing window can include firms that subsequently deregistered.

At the firm level, the distribution showed that asset growth was widespread while client expansion was far less consistent. Nearly two-thirds of the paired firms increased assets by at least 10%. By contrast, 44.6% finished the year with the same number of reported clients or fewer. A total of 30.5% increased assets while their client counts remained flat or declined.

Approximately 25% of firms reported fewer clients, while 19.6% reported exactly the same number. Eleven percent increased client counts by more than 30%, indicating that a minority of fast-growing firms coexisted with a much larger group experiencing limited or negative relationship growth.

The Form ADV data require careful interpretation because an advisory firm’s reported clients can include pooled investment vehicles, institutions and other entities, rather than only individual households. Advisers may also report “fewer than five” clients in a category instead of providing an exact count. Paithos tested several treatments for those censored categories and found that median client growth varied from 1.5% to 2.12%, but the median net change remained one client under every approach.

When the analysis was restricted to 8,782 firms with at least 10 individual or high-net-worth clients, the median firm added seven such clients, representing growth of 3.8%. Even within that more retail-oriented sample, 34.2% of firms recorded flat or declining retail client counts. The result suggests that the weak headline figure was not entirely caused by fund advisers or institutionally focused firms whose business models involve relatively few reported clients.

Firm size was one of the clearest dividing lines. Advisers with less than $100 million in prior-year assets achieved median asset growth of 17.91%, the highest among the size categories analyzed. Their median client-growth rate, however, was zero, and 56.6% reported flat or declining client numbers.

Firms managing between $100 million and $1 billion recorded median asset growth of 14.82% and median client growth of 2.08%. The $1 billion-to-$10 billion cohort produced median asset growth of 13.42% and client growth of 2.33%. Firms above $10 billion reported the lowest median asset-growth percentage, at 12.35%, but the fastest median client expansion, at 4.11%.

The figures point to increasing advantages of scale in acquiring relationships. Large national and regional RIAs can maintain dedicated business-development teams, invest in brand advertising, build referral partnerships and purchase smaller practices. They can also spread compliance, data, technology and content costs across broader asset and revenue bases. Smaller advisers frequently depend more heavily on founder-led referrals and local professional networks, making sustained client acquisition harder to institutionalize.

Client relationships became more concentrated during the period. The largest tenth of advisory firms, identified in the report as those managing more than $10 billion, served 82.5% of all reported clients in fiscal 2025, up from 80% a year earlier. Paithos found that the change persisted after removing the firms with the highest client counts, although much of the shift occurred in non-retail client categories.

Assets were even more concentrated. Among firms reporting positive assets in the wider current-filer universe, 261 advisers with more than $100 billion each controlled $128.31 trillion, or 72.1% of reported regulatory assets. Firms in the $10 billion-to-$100 billion band held a further $33.36 trillion. Advisers with more than $1 billion collectively accounted for almost all reported assets, reflecting the inclusion of major institutional and private-fund managers alongside conventional wealth-management firms.

The report also found that asset growth was not accompanied by a proportionate increase in employment. Median regulatory assets per advisory-function employee rose from $98.6 million at the end of fiscal 2024 to $108.5 million in fiscal 2025. Clients served per employee moved only slightly, from 31.7 to 32.

More than half of the analyzed firms, or 56.7%, increased assets while keeping advisory-function headcount unchanged or reducing it. The likelihood of adding employees increased with firm size: 51.5% of firms above $10 billion reported higher advisory-function staffing, compared with 15.3% of firms below $100 million.

Those ratios can indicate operating leverage, but Paithos cautioned against treating them as direct productivity measures. Form ADV staffing figures can include part-time workers and employees who do not interact directly with clients. Nonetheless, the data show that the typical firm was overseeing a larger pool of assets per reported employee without a meaningful change in client relationships per employee.

For firm owners, that combination can support near-term profitability. Advisory fees are commonly linked to asset values, so rising markets and larger accounts can expand revenue faster than staffing expenses when headcount is stable. Independent research cited by InvestmentNews showed a similar pattern: The Ensemble Practice’s 2025 data indicated an average operating profit margin of 38.6% among 173 participating firms, while organic growth from new relationships fell to 3.7%, the lowest level in its 10-year dataset.

The risk is that asset-driven operating leverage may prove cyclical. A decline in markets can reduce fee revenue without automatically reducing fixed compensation, technology or compliance costs. Firms that have not developed repeatable client-acquisition processes may then find it difficult to replace lost revenue through new relationships. Existing clients may also withdraw assets for retirement spending, taxes, gifts or estate transfers even when the formal relationship remains with the firm.

Demographics make that issue especially important for wealth managers serving older affluent households. The transfer of assets between generations does not guarantee that heirs will remain with their parents’ advisers. A firm that records strong market-driven asset growth but limited household growth may appear healthy while becoming increasingly dependent on a mature client base and a smaller number of large relationships.

Paithos found an association between client growth and several marketing practices disclosed on Form ADV. Among firms that increased client counts by at least 10%, 15.2% reported using client testimonials in advertising, compared with 7.4% of firms whose client counts were flat or lower. Client growers were also more likely to pay outside parties for referrals, at 28% versus 21.1%.

The relationship persisted in the retail-oriented sample. Among firms with at least 10 individual or high-net-worth clients, 17.9% of retail client growers used testimonials, compared with 9.2% of firms with flat retail rosters. Referral payments were reported by 33.3% of retail growers and 24.3% of flat firms.

The study did not establish that testimonials or referral payments caused higher growth. Marketing disclosures were measured during the same period as the growth outcome, meaning successful firms may have adopted marketing practices after expanding. Differences in client mix, business model and organizational resources may also influence both marketing adoption and growth. Paithos described the finding as exploratory and said a future edition would test the relationship using prior-year marketing status and stricter controls.

Even with those limitations, the results align with Charles Schwab’s 2026 RIA Benchmarking Study, which covered 1,236 firms holding more than $2.5 trillion in assets on the custodian’s platform. Schwab found that top-performing firms were more likely to maintain documented referral plans for existing clients and centers of influence. Firms with formal referral programs also generated substantially more referred business than those relying on informal recommendations.

For smaller RIAs, the implication is not necessarily that they must replicate the spending of national consolidators. A more viable response may involve clearly defined client niches, documented referral workflows, stronger relationships with accountants and attorneys, and targeted communications that demonstrate expertise to a specific affluent market. Technology and artificial intelligence could lower the cost of producing personalized outreach, although greater automation also increases the importance of compliance review, data protection and consistent brand standards.

The asset-client divergence may also sustain consolidation. An owner whose firm is profitable but unable to generate recurring organic growth may consider joining a larger organization that provides centralized marketing, recruiting, succession support and acquisition capital. Buyers, meanwhile, can obtain established client relationships more quickly through transactions than through internal prospecting.

Paithos noted that 322 RIA transactions were announced in 2025, citing DeVoe & Company data, but emphasized that Form ADV cannot connect that deal activity directly to the observed changes in assets or client concentration. Acquisitions, organic wins, market returns and reporting changes can all affect the results.

The report also disclosed that Paithos sells marketing and prospecting services to wealth-management firms and could benefit commercially from industry interest in client acquisition. The firm said the analysis was not commissioned by a customer, contained no customer outcomes and relied entirely on public regulatory filings. That disclosure is relevant when assessing the marketing-related findings, although the report’s underlying paired-filing methodology and panel manifest were made public.

The central signal remains that fiscal 2025 produced far stronger asset growth than relationship growth for the median SEC-registered adviser. The industry benefited from expanding portfolios, rising assets per employee and generally favorable economics, but those gains were unevenly distributed and increasingly concentrated among large firms.

Whether the pattern represents a durable structural shift or a market-dependent episode will become clearer as additional filing seasons are analyzed. A weaker investment environment would test whether advisers can maintain revenue through organic inflows and new relationships. For now, the 2025 data portray an industry that became considerably larger without becoming proportionately broader.