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.
Lisette Cooper, founder and CEO of Athena Capital Advisors, says that in its early years, the firm was an institutional consultant on investment strategy and risk management. In the late ’90s, it moved toward serving families with institutional-size assets, and “in 2002 we really became what today is thought of as external CIO and multifamily office. So we moved from that consulting model to an investment management model.”
One atypical factor about Athena is Cooper herself. With a Harvard Ph.D. and a background in mathematics, she “really came in with much more of a focus on some of the quantitative aspects, like risk management,” she says, adding, “I think that distinguishes Athena—we have a focus not only on returns but also on risk, and that’s really distinguished us from our peers: our strong risk-adjusted returns.”
Cooper adds that she “took all this work from physics and brought it to finance.” Interestingly, she points out that the Black-Scholes Equation, used to calculate pricing for stock options, is “the same math in my dissertation that we call the heat flow equation.”
The other principals—there are four altogether—brought their own strengths to the firm in law, estate planning and portfolio management.
Risk Focus Brought Better Returns During Crisis
The focus on risk management, says Cooper, meant the firm did better during the 2008 crisis than many others, bringing in returns much better than market benchmarks, because client assets were already positioned for safety. She explains, “We started taking steps to batten down the hatches in 2007 and early 2008, so we were really prepared when the bottom fell out.”
Having prepared a chart of the firm’s picture of asset allocation over time, Cooper says that, while “it normally changes pretty gradually over time, with our changing perspective on the markets, and we have stepped back into equity markets,” it currently reflects a more conservative position within asset classes in the wake of the crisis.
The basic framework is still the same, she adds, and “on the strategic side, client-specific factors and market factors stayed the same,” but hedge funds now occupy a lower allocation—thanks in part to their less liquid nature, “and also in recognition of this really low interest rate environment we’re in.”
Large Enough, but Small Enough, Too