Jul 03, 2008

Revealed: The 2008 Top Dogs Serve Some of the Wealthiest Clients Around. Here’s How They do it.

By Kathleen M. McBride

(Paragon Wealth Management was listed on Wealth Manager’s “Top Dogs” list in 2008)

Triple-A ratings were slashed, hedge funds were imploding, and it was nearly impossible to place an accurate value on many of the newer structured securities. It was starting to dawn on wealth managers, and many of their clients, that these were not normal investing times-not a regular part of the cycle. While it will take still more time to assess the extent of the damage to investors, the markets and the economy, we do know that a wealth manager’s job just became more complicated.

With all the noise that surrounds them, it is to their very great credit that wealth managers have been able to keep clients focused on the long term while ferreting out the opportunities that market uncertainty presents.

Wealth Manager’s 2008 Top Dogs survey found that the overall amount of assets under management has continued to grow, along with the number of investment firms managing that wealth. The 478 firms that participated in the 2008 survey-our eighth annual ranking of the top wealth managers by average AUM per client-manage an impressive total of $302 billion. Survey respondents do not include banks, broker/dealers or trust companies. Overall assets under management for the 2008 Top Dogs range from $14.4 billion at the largest firm to $36 million at the smallest firm, with an average total AUM of $632.6 million and a median AUM of $236.5 million in 2007, and up 28.8 percent from the $199 million reported in 2006. It’s interesting to note that, of the top to Top Dogs by total AUM, only three make the top 10 when ranked by average AUM per client.

What’s really exciting here are the Top Dog rankings by average AUM per client. Median AUM per client held steady from a year ago-again at $1.4 million for 2008-and up from $1.2 million in 2006. The average AUM per client was an impressive $3.33 million, ranging from a high of $66.9 million at Boston’s Federal Street Advisors, to $150,000 at number 478, The Tranel Financial Group in Libertyville, Ill.

The top 20 firms by average AUM per client include a wide distribution of average client assets from Federal Street’s $66.9 million to $15.2 million per client at Manchester Capital Management in Manchester, Vt; by number 100 in the ranking, The Fairman Group of Berwyn, Pa average AUM per client came in at $2.8 million. At number 200-Charlotte, N.C.-based Carolina Capital Consulting, Inc., average AUM per client was $1.7 million; the number 300 firm, Pinnacle Wealth Planning Services, Inc., in Mansfield, Ohio, reported an average $1.2 million per client. And there is an average $767,000 per client under management at McBearty Capital Management, Inc., in Knoxville, Tenn., the firm ranked number 400.

To give the nearly 500 wealth managers who participated this year, as well as others who chose not to, a glimpse at the inner workings of some of the most successful firms, Wealth Manager Managing Editor Nancy Mandell induced principals at the top five firms to reveal some of their strategy. Starting on page 42 you’ll find all 478 firms and their vital statistics; on page 61, Wealth Manager’s Top Dogs ranking methodology, and on page 59 you can see what we found by the numbers.

Click here to see the full article.