Other provisions in Dodd-Frank required the registration of certain "private fund advisers" under the Investment Advisers Act, which resulted in the addition of more than 1,500 newly registered investment advisory firms.

"Our 2013 report shows that the investment advisory profession is alive and well, with SEC-registered firms employing more than 700,000 professionals and serving more than 25 million individual and institutional clients," said John Gebauer, managing director of NRS. "Owing to expansions in the SEC's data collection activities, we now have even more information about the investment advisory profession. For example, the SEC is collecting more data about private fund advisers than ever before. Private funds have become a mainstream component of the investment advisory profession."

More than one-third of all SEC-registered advisors reported that they manage at least one private fund. Private fund advisors reported a total of 26,752 private funds with collective regulatory assets under management of $8.5 trillion, up from $8.1 trillion in July 2012.

Hedge funds comprise nearly 41 percent of all reported private funds, while private equity funds comprise about 32.5 percent.

Less than 1 percent of advisors reported acting as a qualified custodian in connection with their advisory services.

"Our report underscores the fact that the Dodd-Frank Act has had a profound effect on the composition of the investment advisory profession," said David Tittsworth, executive director of the IAA. "The law has shifted regulatory responsibility for hundreds of smaller firms to the states, while requiring larger private fund advisers to register with the SEC. These dramatic shifts have yielded a net decrease in the number of SEC-registered investment advisory firms. However, many of the core characteristics of the advisory profession remain fairly constant."