AssetBuilder Inc. Registered Investment Advisor - Simple Investing. Smart Future.

I really enjoyed reading this article. However, I am having trouble making the numbers work. Can you help explain them to me? 

If we add up all of the types of advisors listed, we get 232,000:  69,000 ₊ 14,000 +98,000 + 16,000 + 34,800 = about 232,000.  You say that another 23,000 are registered investment advisors.  However, 250,000 – 232,000 is 18,000.  Then you say that 10,000 of these 23,000 are actually part of the 98,000 already counted, so that really brings that number to 13,000.  I am confused. If 18,000 were the actual number, and 10,000 were double counted, then there are actually 8,000 true RIAs.  However, that doesn’t get us from 232,000 to 250,000.  Are there some advisors who are listed in the original research as miscellaneous or uncategorized?  How did you come to the number of 23,000 registered investment advisors? 

The RIA group was composed of those who were RIAs, period. And those who were RIAs but also functioned as broker/dealers. I subtracted the number who were broker/dealers because that tends to influence their income sources. While many act as broker/dealers to their clients benefit, others have a substantial commission income interest.

This should not be interpreted as RIAs are saints while all the others are sinners. As I have pointed out in many columns, it is possible to wear a brokers' hat and lead clients to invest in low cost, high quality funds while getting paid a commission to do it. The problem is that that's a relatively rare event and the pressures on individual brokers to "produce" revenue for the firm are major.

The most important idea here is that financial services firms with high cost business models can't serve their clients interest and feed their business model at the same time. 

Scott