Top Wealth Managers 2015: It's A Bull Market For Financial Advice

From the stock market's gyrations and the collapse in oil prices to tax planning and the "will they or won't they" guessing game around the Federal Reserve's plan to raise interest rates, investors have a lot to grapple with these days. More than ever they are turning to the counsel of independent financial advisors, judging by the swelling assets under management of the firms that make up the Top 100 Wealth Managers.

"It's a bull market for financial advice," says Martin Bicknell of Mariner Wealth Advisors (#12 on the list, $10.1 billion AUM).

The firms on our list collectively manage $467.5 billion. To put that in some perspective, Bank of America Merrill Lynch and Morgan Stanley Wealth Management each have more than $2 trillion under management. Research firm Cerulli Associates expects registered investment advisors and dually-registered advisors will oversee 28% of managed retail investor assets by 2018, up from 20% at the end of 2013. Cerulli points out that advisors in the RIA channel tend to manage more assets than advisors in other channels, meaning that firms with modest headcounts are controlling an ever-larger piece of the pie. To the firms on our list, that makes for a big opportunity keep growing.

Click Here for the 2015 Forbes list of Top 100 Wealth Managers

"It's such a fragmented industry," says Mariner's Bicknell, a sentiment echoed by several of the firms we profile alongside this year's list, including top-ranked Chevy Chase Trust ($21.2 billion AUM), New York City-based Ehrenkranz Partners (#9, $10.9 billion) and Denver's Innovest Portfolio Solutions (#13, $8.9 billion).

The old-line brokerages and wirehouses are also being beset with challenges from the growing independent advisors as well as the new wave of robo-advisors -- firms like Wealthfront, Betterment and a new offering from Charles Schwab -- that aim to automate asset allocation.

Those technology-focused offerings are drawing headlines, but the advisors we spoke with see technology as a tool for their firms, not something that will make them obsolete.

"Technology is in the background," says Chevy Chase CEO Peter Welber, "[but] we never claim to differentiate ourselves on the basis of technology."

Elliot Weissbluth, founder and CEO of HighTower Advisors (#2 on the list, $20.6 billion), sees increased use of technology and the new robo-advisors as a natural evolution of the industry.

"The robo-technology should have a powerful and positive impact for the do-it-yourself crowd and reveal the hidden truth about how expensive and conflicted the brokers are," says Weissbluth, "but if a young married couple views their financial advisor as part of their team...basis points off the portfolio aren't the only thing."

As for the current landscape, views among the wealth managers we canvassed are best described as cautiously optmistic.

The U.S. economy and market has a pretty good track record of being a good bet says Weissbluth, while Innovest's Rich Todd warns that the stock market's current heights "feels like a little bit of a 2000 or 2007."

Click Here for the 2015 Forbes list of Top 100 Wealth Managers

 The Methodology

Data for the Top Wealth Managers list is compiled by our partners at RIA Database. Candidate firms qualify based on both quantitative and qualitative criteria. This year we expanded the list to 100 firms, and ranked them by assets under management for year-end 2014, reported as of March 31, 2015.

Members of the list must have manage at least 50% of their assets on behalf of retail clients, can not run a broker-dealer (they can be affiliated with one), can not be a bank (trust companies are permitted), and must be performing wealth management services. Firms can not have had any regulatory, civil or criminal disclosures.

The list looks beyond exclusively fee-only advisors because the RIA industry is evolving to incorporate more hybrid models as more reps break way from broker-dealers but carry along old business that includes some commission-based work.