We all know about the stupendous growth of the independent advisor space. We know about the flow of advisors and clients from the wirehouses, and the significant value proposition afforded by a client-first, financial planning-oriented approach. But what does that look like in practice?
Which specific RIAs are managing to generate the greatest growth, and how are they managing to do it?
Those are the very questions we’ve set out to answer. It’s taken a lot of sorting, digging, reading and interviewing, and the final product is the one you hold in your hand: Citywire RIA’s inaugural edition of ‘50 Growers Across America.’
As you’re about to see, we’ve selected the fastest-growing firm in every state. For most states, we’ve picked two runners-up. And we’ve done our best to discuss the factors – and the deals – that have driven their growth.
But first, a word on methodology. Our report is based on the most recent Form ADV data reported to the Securities and Exchange Commission at the time of publication, as helpfully gathered by our data partner, Discovery Data. We only considered firms that manage more than $100m, and which aren’t affiliated on a firm level with a broker-dealer or other institution (though a firm’s employees may be dually registered). Since we wanted to make sure we were only considering financial planning-oriented RIAs and not money managers, we excluded firms that don’t report having many financial planning clients. And, in the spirit of fostering apples-to-apples comparisons, we also generally excluded those where the bulk of assets were non-discretionary.
We’ve also endeavored to remove RIAs whose assets under management aren’t truly ‘theirs.’ This is admittedly a bit qualitative, but we did our best to strike companies that are primarily back-end service providers, operating under brand names that are likely unknown to the retail clients being served.
Then we looked at percentage growth in AUM and percentage growth in employees over the last three years, summed those numbers, and came up with our ‘growth score.’ If a firm grew AUM by $100m over the past three years, it got a leg up in the rankings. From there it was simple to select the winner in each state, and then the runners-up if there were any.
After doing all this, we reached out to some of the firms to learn more, which is where the quotes in the pages that follow come from. But you’ll notice that the above process of picking winners and runners up entailed no interaction with the firms. That is to say: The RIAs in this supplement did not ask to be here. They could not compensate us in any way to be considered or to be named. For that matter, they could not do anything to not be named; I’m guessing some of these companies were happily flying under the radar, and won’t appreciate the extra attention.
That brings me to another point. The mention of a RIA is not at all an endorsement of its services or its business. Speaking frankly, some of these firms’ practices, track records and marketing materials seem downright troubling – and we’ve taken care to highlight that where appropriate.
So what should you take away from this special report? Certainly we hope to offer a glimpse of what different wealth markets look like. But more importantly, we think there are lessons to be gleaned from the stories and insights we are able to share.
The RIA industry is growing rapidly. But these firms are out way ahead of the pack. If you want to join them, go ahead and check out what they’re up to.
- Alex Rosenberg, CFA, CFP