The outlook for the economy and financial markets dimmed dramatically this year amid trade turmoil, extreme policy uncertainty and rising volatility — but investment advisors entered a period of elevated risk buoyed by robust business gains throughout 2024.
According to Investment Executive’s (IE) latest Brokerage Report Card, frontline investment advisors enjoyed strong growth in assets last year driven by a combination of market gains and growing client numbers. For the average advisor in IE’s Report Card this year, assets under management (AUM) rose 12.6% between Dec. 31, 2023 (the date for the data reported a year ago) and Dec. 31, 2024, topping the $300-million mark as advisors headed into 2025.
Some of this increase in average AUM can be attributed to expanding client rosters. The average number of client households serviced by the advisors in our research climbed to 200, from 187 in last year’s Report Card. But, given that AUM grew faster than advisors’ rosters, market gains in 2024 were likely a major contributor.
The past year was strong for markets overall, before trade war-driven turmoil toward the end of the first quarter of 2025. Even up until the end of February, the S&P/TSX composite index was up 18.9% over the previous 12 months. U.S. equity markets — both the S&P 500 and the Nasdaq index — were up about 17% over the same period.
Against that backdrop, productivity (measured as AUM per client household) for the advisors in this Report Card was strong, based on their 2024 book and client data. Average advisor productivity was up about 5.5% from last year’s Report Card sample, climbing to nearly $1.7 million from just over $1.6 million.
Growth trends
Typically, the industry’s best-producing advisors — defined as the top 20% in terms of AUM per client household — drive book-growth trends in each Report Card. This year, however, that wasn’t the case. Average assets, client numbers and productivity all grew much more slowly for the top 20% of advisors throughout 2024, compared with the remaining 80% of the advisor sample.
For this Report Card’s top investment advisors, average assets rose 7.2% year over year, a solid performance in isolation. However, that was notably slower than the 17.6% growth rate recorded by the remaining 80%.
The faster growth rate for that latter segment was explained, in part, by the fact that they also reported a notably higher number of client households in 2024. Average client household numbers for the industry’s top-performing advisors were up 3.2% in this year’s report, while the rest of the industry posted an 8.3% gain — an advantage that likely translated into stronger AUM increases.
The top performers also lagged when it came to productivity gains. Their average AUM per client household was up just 2.8% in this year’s report compared with last year’s, less than the 8.6% increase enjoyed by the remaining 80%.
It appears that the larger group gained more high-net-worth clients, helping to boost their average AUM per client household in 2024.
The average advisor in our survey reported that a growing share of their book was allocated to the top tier of clients (accounts worth more than $2 million). Those clients accounted for 28.2% of the average book in this year’s research, rising from 26.3% in last year’s. This trend was led by the remaining 80%, who reported on average that these most valuable client accounts made up 22% of their books, up from 19.9%. The remaining 80% group’s allocation to every other client level was down compared with last year.
For the leading industry performers, their share of client accounts in the top asset range also rose, but by a smaller margin. For this top segment, allocation to the largest client accounts was up to 52% of their book as of Dec. 31, 2024, from 50.7% the year before. And, while their allocations to most of the other client account asset ranges declined year over year, these top-performing advisors did see an increase in the share of their books devoted to clients in the $100,000– $250,000 asset range.
Still, the top-performing advisors continued to hold a considerable edge over the broader group when it came to the size of their books. For the top 20%, average AUM as of Dec. 31, 2024 was $604.6 million, more than double the average of $226.8 million for the remaining 80%.
Also, the much larger asset base for the average top performer was spread over a smaller number of client households, making their average AUM per client household $3.9 million — more than triple the average AUM per client household of $1.1 million for the remaining 80% of the sample.
Product mix
This year’s Report Card also revealed some changes in the product mix of advisors’ books, reported as share of revenue. Across the overall sample, and for the two sub-groups we analyze here, allocations to the top three securities categories — individual equities, individual bonds and mutual funds — all declined year over year between 2023 and 2024.
For the top 20% of advisors, the share of revenue from ETFs rose to 12.7% in this year’s report from 9%. And, for the remaining 80%, the share of revenue from ETFs climbed to 14.5% from 10.5%. So, ETFs usurped bonds as advisors’ third-highest revenue contributor.
The use of ETFs hasn’t come at the expense of most advisors’ bottom lines. Looking at the percentage of advisors at each compensation level, there was growth in the percentage of those who reported earning $1 million per year or more (again, as of Dec. 31, 2024).
So, while the average advisor’s product mix by revenue may be changing, continued growth in AUM and productivity appears to be translating into higher paydays.
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This article appears in the June issue of Investment Executive. Subscribe to the print edition, read the digital edition or read the articles online.