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.
According to Tony Abbiati, managing director, the principals at SCS didn’t work together before uniting under the new aegis. Instead, they shared something other than a common work history: a goal of “building what we eventually hope to be the best-known and most respected independent wealth management firm in the country.” Abbiati concedes that it’s a “lofty goal, but if you don’t have that, you never get anywhere.”
SCS is certainly getting somewhere, at third place on the list of top 10 wealth managers. One factor Abbiati credits is something common to many others on the list: freedom from conflict—no shared fees, no commissions. The firm makes decisions in the best interest of the clients, says Abbiati, adding, “If you asked me 10 years ago, I would have said we’re still a little ahead of the curve.”
Another factor, he says, is that the firm takes all parts of the business seriously. “Many firms are principally financial planning firms,” he says; “their DNA is planning, and they sort of wing it on investments … [it’s] not robust. Others are just the opposite—they’re principally investment firms that do some financial planning because clients want it—and from day one, we said they’re equally important.”
SCS has an investment platform and investment people, he says, that stand on their own and that “anyone, even hedge fund managers, would be pleased” to have investing their money. It also has people who truly understand and “dig into” planning, from estate planning and taxes to insurance. “Most firms,” he adds, “lean heavily toward one or the other and fake the rest.” Since “some clients are really looking for holistic, integrated deep advice on investments and others want investment consultants,” failing to devote resources to both would underserve one group or the other.
Another differentiation, says Abbiati, is the method of its growth. “Firms like ours have two choices” about that, he says. In the first choice, the firm’s founders control the equity and even as the firm grows, the people at the top are “stingy with equity and decision-making power … We said we could do that, but the firm would only be as good as the people who started it.”
The other choice is to spread the wealth, and that’s what SCS does. “If we really wanted to be the best,” he says, “it can’t just be us; we have to be willing to share equity to recruit really good people who didn’t start the firm.”
And of course they’re careful about who they recruit; many come via personal connections and word of mouth. Once people have joined the firm, Abbiati says, the effort doesn’t end. “We’ve spent a lot of time trying to get the right people, and figuring out who are the right people in each division to take over” when the time comes. “We’ve worked really hard on grooming the right people, coaching them to take over leadership.” Starting From Zero