Financial Advisor Magazine’s July 2012 issue has the latest rankings and survey of the RIA firm arena. Reported by Eric Rasmussen, several trends are emerging in this year’s survey.
Breakaway brokers have continued to enter the RIA space even more rapidly following the financial crisis, and some of these firms are growing fast.
Another trend was a modest decline in client assets, not surprising with the volatility of the market.
So why the rapid growth in certain firms? Beacon Pointe Advisors saw their client roster grow by almost 40% and RCL Advisors in New York saw asset growth of 42%. Some 400 firms in the RIA survey saw their assets grow in 2011.
RIA Firms Need to Educate and Market
From the report, it appears that educating clients, marketing their business and mergers and acquisitions play a significant part in the RIA arena growth.
Case in point:
Beacon Pointe Advisors in Newport Beach, Calif., a wealth management firm that also does financial planning, saw its assets rise by more than $500 million to over $4.5 billion by the end of 2011.
“The firm,” says Shannon Eusey, “was formed in 2002 by a group of broker-dealer reps and institutional asset managers who thought they could bring institutional investment advice to high-net-worth clients. The recent growth is partly due to the momentum the firm has seen getting referrals and being discovered on the Internet. But Beacon Pointe has also spent hundreds of thousands of dollars on marketing, focusing on the referral networks of Schwab and TD Ameritrade advisors.”
“We had never hired outside advisors to market our business to go out and sell our services,” Eusey says, “so over the last couple of years we’ve hired breakaway brokers to go out and market and to get our name out there within the community, and that’s why you’ve seen a pretty big jump in the number of clients.”
The company has also acquired two firms in the past year (one in San Jose, one in Scottsdale) and plans to make more in the future if the cultural fit is good.
For further survey and rankings report click here.