A new report published by fintech company SmartAsset aggregates and examines registered investment adviser (RIA) location data as reported to the Securities and Exchange Commission (SEC) via the Form ADV, with a particular lens on filings made since March 2020.

In short, SmartAsset says financial adviser firms are on the move, and it appears the COVID-19 pandemic has presented an opportunity for firms to pull up stakes and relocate their headquarters to new areas that better suit their needs.

“Some firms had already planned to do so in 2020 prior to the pandemic, but changing preferences as a result of the pandemic, such as more affordable office spaces and increased remote work options, may have spurred more registered investment adviser (RIA) firms to relocate their headquarters,” the report suggests.

No matter the reason, SmartAsset says a “mini exodus” has occurred in New York City, while the level of RIA migration to Florida has markedly increased. Overall, about 3% of all RIAs changed their headquarters during the COVID-19 pandemic—a figure that might seem small but that the firm says is significantly higher than what would be expected in a given year.

Headquarter changes were far more common among smaller advisory firms, in terms of both assets under management (AUM) and number of offices, with almost 96% of moves made by RIAs with AUM of less than $10 billion. Additionally, SmartAsset reports, about 54% of firms that changed headquarters moved their entire practice and have no additional offices outside of their headquarters location. Many headquarter changes among larger firms were in the works prior to the onset of the COVID-19 pandemic, the firm adds.

Also notable, the report says, is that more than one in five RIAs that changed headquarters were moving out of New York City. In total, 74 RIAs moved their headquarters out of the city between April 2020 and April 2021. Relative to the total 345 RIAs that changed headquarters, this represents roughly 21% of all moves.

Florida and Connecticut Shine for RIAs

The report shows Florida and Connecticut saw the largest uptick in RIA SEC registrations between 2020 and 2021, with Florida’s representation jumping by nearly 5%. On the other hand, New York and California had the most RIA exits, but their existing concentration of firms allowed both states to remain the most popular for RIA headquarters, followed by Texas and Massachusetts.

“We found that as of April 2021, about 20% of RIAs are headquartered in New York state,” the report explains. “Meanwhile, roughly 13% of RIAs are headquartered in California.”

According to SmartAsset, two other large cities—San Francisco and Chicago—saw a net decrease in RIA headquarters, but the magnitude of these decreases was small relative to the reduction seen in New York City. The data shows Miami was the top city financial adviser firms moved to during COVID-19. Just 75 miles north of Miami, Florida’s West Palm Beach also became a more popular spot for RIAs over the study’s time period.

According to SmartAsset, of the top five cities RIAs moved to the most during COVID-19, the remaining three stand out as being smaller cities or towns outside of larger metropolises. They include Stamford, Connecticut; Carmel, Indiana; and White Plains, New York. Stamford and White Plains are about 40 and 35 miles from New York City, respectively. Meanwhile, Carmel is located 23 miles north of Indianapolis.

Amid Pandemic, Demand for Advice Grows Nationally

Broader context for the SmartAsset location survey can be found in a report published in July by the Investment Adviser Association (IAA), which underscores the responsiveness and resilience shown by the investment adviser community over the past 18 months.

According to the IAA’s report, “Snapshot 2021,” the investment adviser industry continued to experience record-breaking growth during the pandemic months, with close to 14,000 SEC-registered RIAs now in operation, managing $110 trillion in assets for nearly 61 million clients. As the IAA explains, these data points show the number of SEC-registered advisers, the number of clients they served, the assets they managed and the number of people they employed all have reached new record highs.

In a finding likely unsurprising to advisers focused on the defined contribution (DC) plan industry, which continues to experience substantial consolidation, growth has been strongest for the largest advisers. The IAA data shows advisers with more than $100 billion in assets have experienced gains in assets of at least 14% annually over the past five years, far ahead of smaller advisers.

As detailed in the report, SEC-registered firms range in size from local boutiques to multinational corporations. Last year, 88.5% of advisers had less than $5 billion in AUM, with the majority having between $100 million and $1 billion. More than eight in 10 advisers are small businesses employing fewer than 50 people, but over the past three years, the number of advisers has increased in all size categories except advisers with less than $100 million in AUM.