Looking for a financial adviser? Take a look at these leading firms
The stock market, not to mention life itself, has been a rollercoaster over the past few years.
In rinse-and-repeat-like cycles, stocks have tumbled as the pandemic, inflation or the Federal Reserve’s interest rate hikes have darkened the economic outlook – and rebounded as the pandemic or inflation have eased and the Fed has forecast market-friendly rate cuts.
After hitting record highs, markets have wobbled again in recent weeks amid an inflation flare-up that has sparked concerns over whether the Fed really will lower rates this year.
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What’s the average investor to do?
Many experts say the answer is simple: Find a registered investment adviser (RIA) that you like and that fits your financial profile. RIAs are companies with a fiduciary duty to always act in their client’s best interests. They charge fees rather than sales commissions and employ investment adviser representatives (IARs) who are licensed to give financial advice and are increasingly taking a holistic approach to their clients’ financial lives.
Other financial firms, such as broker-dealers, earn commissions from selling stocks, bonds, or mutual funds and need only provide suitable advice. Sometimes they may sell more expensive products that generate more revenue but don’t necessarily meet a person’s long-term goals.
To streamline your search for an adviser, USA TODAY has partnered with market research firm Statista for the second straight year to rank the top 500 RIAs in the searchable lists below.
That’s no mean feat: There were 32,600 RIA firms at the end of 2022 that managed about $115 trillion in assets. About 99% of the money is overseen by 15,100 larger companies registered with the Securities and Exchange Commission, according to the Investment Adviser Association (IAA), a trade group for RIAs. The remaining 17,500 RIAs each manage less than $100 million and are registered with state agencies.
The ranking is based on the growth of the companies’ assets under management (AUM) over the short and long term and the number of recommendations they received from clients and peers.
This year, besides providing an overall ranking, USA TODAY and Statista included separate groupings based on the amount of assets RIAs oversee so readers can compare firms in similar size classes.
Smaller companies may have fewer clients per adviser and provide more personal service, though that’s not always the case. Larger firms may be able to charge lower fees because of volume-based discounts or have more resources for specialized services.
You also might want to choose a firm based on its location, which is included in the rankings.
The top-ranked company, New York City-based Westfuller Advisors, saw its assets grow 58% in a year and 69% over five years. No. 2 Align Impact, of Santa Monica, California, is in a smaller size category but its assets more than doubled in a year. Cary Street Partners of Richmond, Virginia, 11th on the main list, garnered lots of recommendations from clients and peers.
RIA’s can serve a vital purpose, particularly when the market and economy are volatile, as they are now, industry officials say.
“When there’s uncertainty in the market, that is when you need advice,” says Gail Bernstein, general counsel of the IAA. “There’s a lot of hand-holding.”
A growing number of Americans who handled their own investments before the ups and downs of the pandemic now want help, says Eileen Stevens, a wealth adviser at Corient Private Wealth, an RIA in New York City.
“They’re saying, ‘It’s hard and scary to do it on my own,’” Stevens says.
And while some people just want an RIA to manage their investment portfolio, most are looking for more comprehensive financial services that include retirement, estate and tax planning as well as bill paying and a college savings roadmap in some cases, Stevens says.
Such a sweeping approach, she says, can not only maximize investment returns but also map out a life strategy that may include starting a family or buying a house.
During market downturns, some people panic and want to immediately sell stock holdings, Bernstein of IAA says. Investment advisers, she says, may “talk them off the cliff” and tell them “to just sit tight.”
“They might say, ‘You’ll need that money in six months because you have a college payment coming up,’” Bernstein says.
RIAs typically charge an annual percentage of the assets they manage, often about 1%. Someone with a $100,000 portfolio then would pay about $1,000 a year. An adviser typically would oversee the money throughout the year, buying and selling securities based on the client’s overall goals. RIAs typically require minimum investments, such as $100,000 or $500,000, though in most cases a custodian such as a bank or broker-dealer holds the cash.
Advisers also can charge a fixed annual fee no matter how much you invest, a flat fee based on the one-time preparation of a broad financial plan or an hourly fee.
Many RIAs specialize in market niches that require more nuanced knowledge of their clients’ needs, such as athletes, restaurant owners, divorcees, medical professionals or Generation Z members.
A growing share of people in their 20s are seeking financial advice, Stevens says, including freshly minted tech or hedge fund executives who accumulate wealth early in their careers.
Some young adults want guidance on how to strike a work-life balance that allows them to use their savings for trips or other experiences, she says. Others want to ensure their investments meet environmental, social and governance (ESG) goals.
Young investors are also helping drive the popularity of robo-advisers, digital platforms that create portfolios based on algorithms at low cost with little or no minimum investment. But those that are RIAs must still serve the client’s best interest.
“The obligation is still the same,” Bernstein says.
You can learn more about a firm’s specialties and background on its website as well as from the firm’s Form ADV, which it files with the SEC. And you can verify a firm’s registration with the SEC’s Investment Adviser Public Disclosure tool and check the backgrounds and any disciplinary actions at the Financial Industry Regulatory Authority’s (FINRA’s) BrokerCheck website.
Further details about Statista’s methodology and contact information may be found on Statista’s website.
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