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
Asked to differentiate the firm from its competition, some of which includes Wall Street behemoths, Cooper says, “We’re large enough that we can provide all the perks and services of a big organization, but we’re small enough that we have a very customized solution with very high-quality client services.”
She adds, “Each client advisor has a relatively small load of clients, compared with those large institutions, and on the research side we’re able to give our clients access to niche managers and top-quality managers that might be under the radar screen for a large institution such as a big bank or wirehouse.” The firm is also independent and fee-only, and doesn’t restrict itself to products or services from a single firm—instead going “wherever we find the best investment ideas and offerings.” In addition, she says, “We’re very proud of our research team and also our client service team.”
Growth has been mostly organic, although the firm has completed “one small acquisition” and is considering others in the future. Still, building client portfolios and “selectively” adding new clients—both private and “some foundations and endowments”—allows the firm to continue to concentrate on serving those clients and remain client-focused. “Every client is important to us,” she says.
The firm is, says Cooper, more than 80% employee owned, and the plan is to add additional partners in the future. Adding other staff is also part of the plan, and Cooper says, “We look for employees who can embody the wisdom and caring of Athena.”
She adds, “Like people tend to attract other like people, with really high ethical standards of integrity and high standards for themselves,” she says, and while the firm works with recruiters it also values word-of-mouth recommendations. Relocations can also play a role, and she says the firm is happy to be able to bring in people from other regions who have come to the Boston area. Both a succession plan for the firm’s future and career paths for employees’ futures are in place, she adds.
‘Ready to Join the World’
The firm “ferociously” guards its reputation, continuing to employ risk management not just in terms of investment management but also in terms of operational risk management for the firm. Cooper says that news flows are watched carefully. “Is there anything that we really need, to have our antenna up for our clients? Whether it’s the fiscal cliff or worrying about Israel and Iran,” she explains, everyone is alert—“just being sure that we have, as best we can, early warning signals and [that we] pay attention to them.”
The firm’s other focus on the future is its own position and prominence. Cooper says the firm is “making sure our relationships and key providers know about Athena and know what we do, because in size, it really has moved past being a small, founder-centric business that’s a secret. So we’re really trying to be sure we are communicative.”
She concludes, “I think for a while we were off the radar screen. And we’re really ready to … join the world of investment management as a thought leader, and communicate our best ways to manage assets for the private client and institutional investor.”
For more on the 2012 Top Wealth Managers, please visit our home page.
For information on reprints of this profile and other 2012 Top Wealth Managers content, we invite you to visit our reprints partner, PARS International.