2010 is a landmark year for the financial industry–given ongoing tumult in the economy and markets and legislation that is emanating from Washington. Change may be the watchword for this year and next–and registered investment advisors (RIAs) will feel it along with nearly every other financial services entity. For RIAs and broker/dealers, these will be the most fundamental changes since the Securities Exchange Act of 1934 and Investment Advisers Act of 1940.
Regulatory uncertainty was cited as one of “three most critical risks to your firm” by many RIAs who completed the 2010 Top Wealth Managers annual survey. Perhaps the biggest change will be if brokers who provide advice to investors would have to do so under the fiduciary standard, as RIAs do under the Investment Advisers Act of 1940.
For WealthManagerWeb.com, this is a landmark as well: it is the 10th anniversary of the annual Top Wealth Managers survey. This year there were 52 questions on the survey, and we appreciate the time participants took to provide the candid answers to those questions. This assures that we have the most current, comprehensive information about RIA firms. All in all, 348 firms qualified to be part of the Top Wealth Managers rankings, which are based on firms’ average assets under management (AUM) per client.
This year, we deliver a new Top Wealth Managers section with Philip Palaveev’s Special Report and analysis, our exclusive survey findings, profiles of Top Wealth Managers, and a new way of looking at our rankings. In addition to the classic rankings for this annual survey by average AUM per client, there’s an interactive database that will enable you to see firms sorted by many different attributes, including total AUM, average AUM per client, city or state, year the firm started, minimum fee or alphabetically. And, we’ve provided active links to participant firms’ Web sites.
The Top Wealth Manager rankings range from Athena Capital Advisors LLC, a multifamily office with an average $105, 805,381 per client, to The Mutual Fund Store, a franchise network of fee-only RIAs with an average of $171,012 per client. But total AUM is a different picture: the highest total AUM for the group belongs to GenSpring Family Offices, with $17,967,269,369 in assets; the smallest in the group is the $50,374,218 in total AUM at Loretta Nolan Associates LLC.
Critical Risks to Clients
When we asked, “What are the three most critical risks to your clients now?” there was one undercurrent running through many of the answers: uncertainty. Uncertainty about taxes, estate plans and interest rates has made it challenging to plan or to allocate assets in the classic ways. Estate planning was unexpectedly thrown up in the air by the failure of legislators to enact laws governing the estate tax by the end of 2009, eliminating the estate tax in 2010, changing the basis calculation and, of course, the estate tax comes roaring back at the stroke of the new year 2011.
Clients are also concerned with job loss, continued volatility in the markets and economy, outliving retirement savings, and helping the next generations deal with wealth in responsible ways. These issues are among the ones that “keep clients awake at night,” and they keep advisors awake at night too.
Critical Risks to Advisors
In addition to what worries clients, advisors are concerned with continued uncertainty in the markets and economy, recruiting and retaining talent, managing growth, succession planning, and technology risks, like keeping up with technology or integrating the disparate systems across vendors, but disaster recovery and identity theft. RIAs also are concerned about whether to allocate for inflation or deflation and the low interest-rate environment.
Primary Investment Goals