top wealth managersIf beauty is in the eye of the beholder, success is in the mind of those being beheld. Success is a measure that each firm will define for itself and that each business owner will set for his or her own firm. Still, there is little doubt that the participants in the 2011 Top Wealth Manager Report have been very successful as judged by most standards.

The 370 firms participating in the report have reached record levels of revenues, assets and productivity and have created strong brands, competitive presence in their markets and undoubtedly a great record of client service.

The Top Wealth Manager report is open to participation to all firms who define themselves as wealth managers and have their own registration as a Registered Investment Advisor (RIA) with the Securities and Exchange Commission. We strongly believe that the report captures the largest and most successful independent wealth management firms—those that are owned and operated by the advisors. The respondents collectively manage $330 billion in assets under management (AUM), service 175,000 clients and employ 6,780 people. 

There is no doubt that independent wealth management firms continue to experience success in the market and are growing larger and stronger every year. In 2010, the average assets under management (AUM) for participating firms reached $754 million—a record average for the survey. The average growth in AUM for the firms was 18.8% compared to 12.8% return for the S&P Index. The smallest of the top 100 firms in the report had $780 million in AUM.

Top Wealth Managers--AUM by Year

The results of participating firms go further than measuring the high level of assets, their productivity ratios, the size of their client relationships and their staffing. These numbers have all made a strong recovery following the financial crisis and continue to trend upward. Still, as we will see, growth continues to be slow and even though firms are hiring staff again, a sense of caution is felt in the financial ratios as well as the written comments of the participants.

Top Wealth Managers--Percentage Change in Revenue

Top Findings

The key trends that we observe in this year’s report are:

  • The growth in the industry is consistent but relatively slow. Firms have only grown by approximately 5% net of market appreciation. 
  • The largest firms in the industry continue to grow faster on a percentage basis than their smaller peers. This is in relation to the effect of dominance within a market and the momentum that growth creates.
  • There are great discrepancies in pricing among firms that are servicing the same size of client relationship. Clients may be paying significantly different prices from one firm to another. 
  • The pricing differential may be explained by a variation in the range of service offerings and/or divergent investment strategies and capabilities.
  • A formal, written financial plan is almost disappearing from the service package of wealth management firms, with only 25% of all firms offering a written financial plan. 
  • Productivity continues to improve with revenue per professional, reaching an average of $445,000 per professional. Still, the productivity ratios are far from their pre-crisis levels when the largest firms in the study averaged close to $750,000 in revenue per professional. Perhaps such lofty levels of productivity may be gone for good. 
  • High average client relationship size (by AUM) does not always equal high productivity. In fact, firms working with clients who have between $5 million and $10 million in AUM had similar productivity ratios to firms working with clients who had more than $10 million in AUM. 

See part two of our special report on the findings of the 2011 Top Wealth Managers Survey.

Return to our 2011 Top Wealth Managers home page for further analysis and data.

See our report on the 2010 and previous years’ Top Wealth Managers.