RYG Full Report Aug 2012.pdf
Executive Summary of Findings
Investment advisors are those firms that offer mutual funds, ETFs, pooled and separate account management arrangements. In
general, US investment advisory firms that manage $100 million in assets or greater are required to register with the U.S. Securities
and Exchange Commission (“SEC”) via Form ADV. Our firm recently downloaded the July 2, 2012 SEC Form ADV data. The data
consisted of files from 11,622 advisors submitting Form ADV as a registered advisor.
These advisors include many private fund advisors, including hedge fund and private equity fund advisors. Venture capital advisors,
foreign private advisors, and small private fund advisors (those who manage less than $150 million) are currently classified by the
SEC as “exempt” advisors. Data relating to exempt advisors are not included in this report.
A total of 11,622 investment advisors are registered with the SEC, as of July 2, 2012. These advisors have total regulatory
AUM of $49,446,235,716,391. In other words, they manage nearly $50 trillion dollars.
Red List: Of the 11,622 registered advisors, we identified 1,315 advisors (11.31%) that answered “yes” to one or more
questions that constitute a “significant adverse regulatory event” in Form ADV. Red List firms manage over $23 trillion
dollars, or 46% of all assets managed by SEC-registered investment advisors.
Yellow List: Of the 11,622 SEC-registered investment advisors, we identified 4,970 advisors (42.76%) that had a “yellow flag”
uncovered in the review of their Form ADV. Yellow List firms manage over $21 trillion dollars, or 44% of all assets managed
by SEC-registered investment advisors. Many yellow flags relate to a firm’s organizational structure, although some yellow
flags relate to adverse regulatory events disclosed on Form ADV that do not rise to the level of a red flag.
Green List: The Green List contains firms that have no significant adverse items on Form ADV. In other words, these are the
firms that do not have red or yellow flags. Of the 11,622 registered investment advisors, we identified 5,337 advisors
(45.92%) that meet these criteria. Green List firms manage over $4.7 trillion dollars, or approximately 10% of all assets
managed by SEC-registered investment advisors.
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