AUM Up 9% Reaching Record Levels Averaging $81M per Advisor in 2012

The average financial advisor’s assets under management increased to $80.8 million in 2012, up 9% from 2011, reaching a record level.  Along with the sharp rise in AUM, the average revenue per advisor increased 2% over 2011 to $550,000.  This information was shared in a recent article from On Wall Street, citing an annual report from PriceMetrix.

Advisor AUM Reaches Record
Mar 12, 2013
By Charles Paikert

The shift towards the AUM model continues, but at a slower pace than prior years.  “The proportion of assets held in fee-based accounts rose to 28% from 26% at the end of 2011, according to the study.  Fee-based revenue increased slightly — to 45% of total revenue, from 43% — and the average number of fee accounts per advisor rose from 85 to 92.”

While increasing AUM and revenue per advisor increased, average revenue on total assets decreased.  The “…average revenue on assets fell 3% — to an average 0.69%, down from 0.72% the prior year — as revenue growth did not keep pace with asset growth.  The average revenue on fee-based accounts “…declined to 1.06% last year from 1.14% in 2011.”  This is partly due to new large accounts that are typically charged lower rates, but it could indicate new accounts are being charged lower fees.

The average number of households served by an advisor went down slightly, from 165 in 2011 to 159 in 2012, while the average household assets increased 13% to $491,000.  PriceMetrix suggests that advisors should focus on building strong relationships with large assets households and work to increase the number of accounts per household.