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Top advisers stand out on metrics of growth and productivity
InvestmentNews recognizes leading firms with Best Practices awards
By Liz Skinner | October 15, 2014
From more than 300 financial advisory firms, a dozen were chosen to receive Best Practices awards from
InvestmentNews for being among the fastest-growing, most productive and profitable businesses in the
industry.
The firms were named top performers based on financial parameters that illustrate growth and adviser
profitability, including profit margin, pretax income per owner, and revenue per professional. All winners
participated in the InvestmentNews 2014 Financial Performance Study of Advisory Firms.
"This is an elite group," Suzanne Siracuse, publisher of InvestmentNews, said in presenting the awards.
"Your stories, we hope, will help to educate and inform thousands of other advisers who aspire to be the
industry's top firms."
The advisory industry as a whole has been growing at about 20% a year over the past five years in terms of
assets under management, according to the performance study, which included 305 firms. The top
quartile of advisers is gaining AUM at a pace of 25% a year on average, and they are doing a superior job
attracting highly profitable clients, boosting business development, investing in employees and planning
strategically.
The best practice awards were presented in a ceremony Tuesday in Chicago to LLBH Private Wealth
Management, Roof Advisory Group, Balasa Dinverno Foltz, The Colony Group, Carson Wealth
Management Group, Altfest Personal Wealth Management, Kayne Anderson Management, HFS Wealth
Advisors, AEPG Wealth Strategies, Modera Wealth Management, Rowling and Associates and
Carnegie Investment Counsel.
The fastest-growing firms focus on measures of productivity, said Brandon Odell, director of business
consulting for The Ensemble Practice, consultants on the performance report. A key parameter is revenue
per professional, which was $942,317 on average last year for the top quartile of firms, compared to
$468,661 for all other firms, according to the report.
"If revenue per professional is too low, it signals that advisers need to boost productivity," Mr. Odell said.
"If it's too high, the firm may need to hire more advisers or make other investments to boost productivity."
Improved productivity also can come from focusing on particular clients.
Dennis Kelly, partner and general manager of Richfield, Ohio-based HFS Wealth Advisors, said his firm is
focused on the client experience and introducing services and technology applications that make the firm
more attractive to high-net-worth clients.
"We're making sure we provide the kind of service to retain these clients and make us referable," he said.
At HFS Wealth Advisors, which has $200 million in client assets, the executive team measures and uses
the revenue-per-client parameter to evaluate the efficiency of the overall book and whether business is
improving and showing a return to the firm, Mr. Kelly said.
Top-performing firms also focus on supporting their own employees.
“What keeps me up at night is whether we are creating the environment for people to be at their best,”
said Armond A. Dinverno, president of Balasa Dinverno Foltz of Itasca, Ill. “Growth is all about our
people. It's about attracting and retaining top talent."
Some top performers have used acquisitions as a strategy to keep up the pace.
Boston-based The Colony Group has integrated four firms in the past two-and-a-half years, said Robert
Glovsky, vice chairman of the firm, which has about $4 billion in AUM.
Acquisitions boost client assets, but another important aspect of deals are the new advisers who become
part of the company.
"Part of the reason we do these inorganic deals is for the talent to deepen at the firm," Mr. Glovsky said.
"We look for wealth management experts who add something we don't have."
The challenge with acquisitions today is that the number of buyers greatly outstrips the number of sellers.
About 28% of advisers said they have sought to buy a firm in the past two years, compared with 4% who
have tried to sell, according to the performance report.
Looking forward, the market may be even more lopsided.
About 33% of firms said they anticipate buying a firm in the next two years, while 5% said they planned to
sell, the study found.
Ron Carson, founder of Carson Wealth Management Group of Omaha, Neb., and other leaders of topperforming advisers said strategic planning also is key to achieving high productivity and profitability.
"The standards you set are the results you get," said Mr. Carson, whose firm has AUM of $4.3 billion.
Yonhee Gordon, principal and chief operating officer of JMG Financial, which won a 2013
InvestmentNews Best Practice award, said improving profitability overall requires a two-pronged
business approach.
"Firms need to focus on revenue and people," she said.
Trevor Hunnicutt contributed to this story.