If 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.
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.