FA Magazine July/August 2021 - Page 53

FA ’ s 2021 RIA RANKING

2020 totAl ASSEtS RANK
FIRM NAME
locAtIoN
YEAR END 2020 ASSEtS ($ MM )*
% GRoWtH IN ASSEtS 2019-2020
ASSEtS PER clIENt ($ MM )**
% GRoWtH IN ASSEtS PER clIENt
% cHANGE IN No . oF clIENtS
407
Droms Strauss Wealth Management
St . Louis , Mo .
591.24
12.89 %
$ 1.70
7.36 %
5.15 %
408
Claro Advisors
Boston , Mass .
588.34
32.63 %
$ 0.94
10.81 %
19.69 %
409
Socius Family Office
Fort Lauderdale , Fla .
584.17
7.54 %
$ 3.95
6.09 %
1.37 %
410
J . P . King Advisors
Walnut Creek , Calif .
575.90
12.61 %
$ 1.59
11.37 %
1.12 %
411
The Arkansas Financial Group
Little Rock , Ark .
573.51
8.95 %
$ 1.84
8.25 %
0.65 %
412
Summit Wealth Partners
Orlando , Fla .
571.04
18.72 %
$ 0.78
-22.57%
53.33 %
413
KMH Wealth Management
Victoria , Texas
569.26
11.93 %
$ 1.19
7.24 %
4.37 %
414
Insight Wealth Partners
Plano , Texas
569.03
30.63 %
$ 0.84
19.99 %
8.87 %
415
Frisch Financial Group
Melville , N . Y .
564.93
17.47 %
$ 1.20
14.97 %
2.17 %
416
BlueSky Wealth Advisors
New Bern , N . C .
560.78
23.47 %
$ 1.75
13.83 %
8.47 %
417
W . A . Smith Financial Group
Sheffield Village , Ohio
541.77
32.07 %
$ 0.34
-7.46%
42.72 %
418
Investmark Advisory Group
Shelton , Conn .
541.68
17.95 %
$ 0.98
16.67 %
1.09 %
419
The L . Warner Companies
Timonium , Md .
538.75
9.04 %
$ 1.99
11.45 %
-2.17%
420
Peavine Capital
Reno , Nev .
538.00
53.71 %
$ 23.39
153.96 %
-39.47%
421
Mirador Capital Partners
Pleasanton , Calif .
536.00
46.45 %
$ 1.07
34.73 %
8.70 %
422
Bernhardt Wealth Management
McLean , Va .
534.28
8.98 %
$ 1.92
18.00 %
-7.64%
423
Greystone Financial Group
Bloomfield Hills , Mich .
528.27
-11.82%
$ 0.85
-7.73%
-4.44%
424
Financial Management Strategies
Broadview Heights , Ohio
525.16
17.34 %
$ 0.36
7.72 %
8.93 %
425
Excalibur Management Corp .
Newton , Mass .
519.00
6.96 %
$ 1.84
7.72 %
-0.70%
426
Porter White Investment Advisors
Birmingham , Ala .
517.21
6.79 %
$ 4.83
6.79 %
0.00 %
427
Tobias Financial Advisors
Plantation , Fla .
513.00
19.58 %
$ 2.00
6.09 %
12.72 %
428
Frazier Financial Advisors
Dublin , Ohio
510.00
41.67 %
$ 1.52
31.09 %
8.06 %
429
Birchwood Financial Partners
Edina , Minn .
506.94
13.59 %
$ 1.32
14.18 %
-0.52%
430
FMA Adisory
Harrisburg , Pa .
505.00
13.48 %
$ 0.84
8.75 %
4.35 %
431
Abound Wealth Management
Franklin , Tenn .
501.39
50.09 %
$ 1.44
15.48 %
29.96 %
432
McIlrath & Eck
Arlington , Wash .
501.04
26.14 %
$ 0.50
20.49 %
4.69 %
433
Elser Financial Planning
Indianapolis , Ind .
500.34
15.90 %
$ 2.00
4.31 %
11.11 %
* Discretionary and nondiscretionary AUM reported on Form ADV . ** Average assets per client relationship . † Transitioned to an independent RIA in 2020 .
to see fIRms wIth uNdeR $ 500 mIllIoN thAt pARtIcIpAted IN the suRvey , vIsIt www . fa-mag . com / research / ria-survey .
continued from page 38 tegic Partners , has been working over the past five years with private equity investors , family offices and other investors in the RIA space and has seen 100 different transactions he says . He says he ’ s seen the giant firms ’ valuations increase from 12 to 14 times EBITDA to 16 to 20 times EBITDA on much larger cash flow numbers . At the same time , the total cost of serving clients has generally declined .
“ The cost at the customer level has declined or improved , but the actual profitability of the RIAs has generally gotten better ,” Roth says . There are a couple of reasons for that , he says . “ RIAs that use third-party managers for most of the portfolio construction have shifted their core holdings to ETFs and index funds and other low-cost options for the client . … If you ’ re charging 85 to 100 basis points five years ago , you ’ re probably still charging somewhere in that range , maybe two or three basis points less .” If you ’ re doing something simpler like managing large-cap stocks , you probably feel more fee compression in your core offerings , since you can ’ t charge more for hugging an index , he says .
Firms with $ 5 billion to $ 10 billion serving the mass affluent and high-net-worth segments , those focused on helping clients with their financial planning and goals and tax-managed portfolios , are running EBITDA to revenue margins in the 35 % to 40 % range . “ Those firms are the firms that are most interesting to private equity ,” Roth says . “ Because private equity firms are using leverage themselves to buy these businesses , it ’ s really important that the firms are growing .” It wouldn ’ t be attractive to PE if the firm was growing with market , he says — lifestyle practices growing at only 3 % to 5 % a year .
Roth says the reason there are five times as many firms investing in the retail wealth space as there were five years ago is that 1 ) it ’ s cheap to borrow money right now , and 2 ) it ’ s hard to find other industries protecting 35 % to 40 % margins like retail wealth is .
july / AuGust 2021 | fINANcIAl AdvIsoR mAGAzINe | 49