A hunt for the best talent, a hunger for oganic growth and a pursuit of the best new technology: These appetites reshaped and reformed this year’s annual RIA Leaders rankings. The best part? The firms that made our cut (expanded this year to 150 from 100) did so while rejecting partnerships with outside affiliations that could threaten their independence.
“It gets harder as you get bigger because you are always tempted to do some of these side businesses” that can come with commission sales or external shareholders, Russ Hill, the CEO and chairman of No. 12 firm Halbert Hargrove, told Senior Editor Ann Marsh, who wrote the story.
These forces also mean it’s challenging (re: hair pulling, agonizing, anguishing), for Financial Planning’s editors to create our exclusive list with its resolute focus on independence. Every year, we are faced with pulling RIA firms after they launch new lines of business or change their ownership structure. In fact, three of the four firms to grace our annual cover since the list’s inception four years ago have dropped off due to such changes.
GenSpring, which appeared on the 2012 cover, disappeared from the list the following year after disagreements between management and the firm’s bank owner. This year, however, GenSpring’s co-founder Maria Elena “Mel” Lagomasino reappears with independent firm W.E. Family Offices at No. 14.
The RIA firms that meet our stringent criteria must pursue a wide array of growth strategies, often simultaneously. They aggressively recruit new talent. They seek organic growth in creative ways, such as No. 18, Wetherby Asset Management of San Francisco, which is holding educational seminars on topics such as mindfulness.
And some pursue tie-ups with other firms that will improve their technological expertise. Note the alliance between No. 17, Federal Street Advisors, which is 25 years old, with No. 59, Pathstone Family Office, which is five years old. The union will give Federal Street “a huge jump in our capability and in productivity,” Federal Street CEO John LaPann told Marsh.
Against this rapidly changing backdrop, what are the best methods to identify and rank independent RIAs? We grapple anew with that question every year. As Marsh says, “This whole space — independent advice — was born out of a huge judgment call in favor of truly independent advice.”
The RIA industry has evolved quite a bit during my career in financial journalism spent at Bloomberg and the BBC, plus Reuters, where I covered wealth management. As Financial Planning’s new editor-in-chief, I will especially value a continuing dialogue with readers as we track the evolution together. I look forward to hearing from you on Twitter, LinkedIn and Facebook.