Registered investment advisor firms apparently are on the move, a new study based on Form ADV data finds.
While some firms had already planned to do so in 2020, changing preferences—such as more affordable office spaces and increased remote work options—appear to have prompted more RIA firms to relocate their headquarters, according to the study by SmartAsset. For one thing, the study found a mini-exodus from New York City and increased migration to Florida.
SmartAsset examined a total of 10,955 financial advisory firms—representing about 78% of all SEC-registered investment advisors—for changes to RIA headquarters on Form ADV filings between the end of March 2020 and March 2021, based on SEC data as of April 2020 and April 2021. The study excluded any firm that did not report having a headquarters in either their March 2020 or March 2021 SEC filing.
According to the findings, about 3% of RIAs changed their headquarters during this period, and shifts were concentrated in certain states and cities. Headquarters changes were more common among smaller advisory firms (in terms of both AUM and number of offices); nearly 96% of the moves were made by RIAs with AUM less than $10 billion. Additionally, about 54% of firms that changed headquarters were moving their entire practice and have no additional offices outside of their headquarters.
Biggest ‘Losers’
New York City saw the largest decrease in the number of RIAs. In total, 74 RIAs moved their headquarters out of the Big Apple between April 2020 and April 2021, representing about 21% of the 345 RIAs that changed headquarters nationwide, the study notes. According to SmartAsset’s analysis of SEC data, nearly 1,730 RIAs were registered with headquarters in New York City as of April 2020; that figure dropped to 1,665 as of April 2021. Meanwhile, 11 moved there over that period, the study notes.
Between 2020 and 2021, 46 RIAs left New York State, while 18 left California. Even so, those states remain the top two most popular states for RIA headquarters, followed by Texas and Massachusetts. As of April 2021, about 20% of RIAs were headquartered in New York State, and approximately 13% in California, according to the study.
San Francisco and Chicago also saw a net decrease in RIA headquarters. SmartAsset reports that nine financial advisor firms left San Francisco, while six left Chicago. Portland, OR and Indianapolis, IN also saw slight decreases.
Top Destinations
Florida and Connecticut saw the largest increase in RIA SEC registrations between 2020 and 2021. The number of RIAs with headquarters in Florida and Connecticut increased by 25 and 11, respectively. In Florida, that jump represents about a 5% increase in the number of RIAs based there.
Miami was the top city destination for financial advisory firms. SEC data shows that from April 2020 to April 2021, the number of RIAs with headquarters in Miami rose from 96 to 104, with 10 firms moving into the city and two moving out, the study found. West Palm Beach also became a more popular spot for RIAs over the past year.
Of the top five cities RIAs moved to the most during the peak of the pandemic, the three others stand out as being smaller cities or towns outside of larger metropolises. They include Stamford, CT; Carmel, IN; and White Plains, NY.
