Glossary term
Regulatory Assets Under Management (RAUM)
Regulatory assets under management is the Form ADV measure advisers use to report managed securities portfolios for regulatory purposes.
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What Are Regulatory Assets Under Management (RAUM)?
Regulatory assets under management, or RAUM, is the assets-under-management measure investment advisers report on Form ADV for regulatory purposes. It is not always the same as the AUM figure a firm uses in marketing, billing, or client conversations.
RAUM is built around securities portfolios for which the adviser provides continuous and regular supervisory or management services. Because the calculation follows Form ADV instructions, it can include assets and valuation approaches that make the number look different from a simpler client-facing AUM figure.
Key Takeaways
- RAUM is a regulatory reporting measure used in adviser filings.
- It helps determine whether an investment adviser registers with the SEC or state regulators.
- RAUM can differ from a firm's marketing AUM, fee-billing AUM, or net client assets.
- Investors should read RAUM as a regulatory data point, not as a direct measure of quality, profitability, or client outcomes.
How RAUM Works
An adviser reports RAUM in Form ADV Part 1A. The figure is tied to the securities portfolios the adviser manages on a continuous and regular basis. It generally looks at gross assets rather than subtracting every form of leverage or liability the way a reader might expect from a net portfolio value.
RAUM matters because adviser registration rules use it as a threshold concept. Larger advisers often register with the SEC, while smaller advisers commonly register with state securities regulators, subject to exceptions and special categories.
RAUM Compared With Other AUM Figures
Measure | What it usually represents | How to read it |
|---|---|---|
RAUM | Regulatory assets reported under Form ADV instructions | Useful for registration and oversight context |
Client AUM | Assets an adviser describes as managed for clients | Useful for scale, but definitions vary |
Billing AUM | Assets on which the adviser charges a fee | Useful for understanding fees |
Net assets | Assets after certain liabilities or leverage | Useful for economic exposure, depending on context |
What Investors Should Not Assume
A high RAUM figure does not prove an adviser is better, safer, cheaper, or more suitable. It also does not show how much each client owns, how portfolios are invested, or whether the adviser has conflicts. A smaller RAUM figure does not automatically mean the firm is weak or inexperienced.
RAUM is best used with the rest of Form ADV. Investors can compare the reported figure with the firm's services, client types, fee schedule, custody disclosures, disciplinary history, and brochure language.
The Bottom Line
Regulatory assets under management is a Form ADV reporting measure that helps define an adviser's regulatory profile. It is useful, but it should be read as part of the adviser's disclosure record rather than as a standalone judgment about the firm.