One hundred firms make up AdvisorOne’s 2012 Top Wealth Managers, as measured by assets under management per client, with data as of 12/31/11.
Here we present a profile of the crème de la crème of the Top Wealth Managers—those 10 firms that topped the list in in our 2012 survey.
View the list of all 280 firms in our 2012 Top Wealth Managers survey.
At the time founder and President John LaPann launched Federal Street some 20 years ago, he says no one was really doing what has developed into open-architecture wealth management for individuals and families. “There were financial planners and big institutional consultants, but nobody was really addressing the needs of institutional-sized families,” he says. “That was the original concept.”
Putting the client first and conveying service and advice in a way that would make sense to clients were other objectives. Such principles gave the firm a “first-mover advantage.” While it may not sound like an objective when most others are constantly looking to expand to the largest size possible, LaPann adds that keeping Federal Street boutique-sized was another objective, “because we felt we could be the most responsive, nimble and creative if the demands of the organization are few and client concerns are addressed first.”
The formula seems to have worked, with organic growth and clients coming in mostly through word of mouth from existing clients whom LaPann says the firm has “made … so happy with work we’re doing for them.” Staffers now number 26, with four client-facing principals, a director of research and a research team so that the firm has “the depth of an institution with the creativity of a boutique.”
(In the Top Wealth Managers survey, as of Dec. 31, 2011, Federal Street reported it had 27 staffers.)
“Our short term is longer”
If 2008 did anything, it demonstrated a need to re-evaluate accepted beliefs and practices. Sometimes that vindicates a firm’s approach. Says LaPann, “I don’t think any firm that went through the period of 2007, 2008 and 2009 and came out successfully on the other side didn’t take the opportunity to evaluate the way they formed advice, and we’re no exception. We actually ended up reaffirming our practices.”
Among other things, the firm evaluated its use of a long-term perspective and its practices of looking at investing rather than trading, its method of choosing managers, the way it kept its clients informed and how it set good expectations.
LaPann says, “All those, we were happy to see, are sort of fundamentals for us, but we I would say the shifts we made really were more in terms of taking our long-term perspective and sort of laying over it a shorter-term perspective. Our shorter term, which is three to five years, is actually longer than most other firms’.”