With the number of financial advisors and other professional staff at registered investment advisory firms topping 1 million for the first time, these firms are fueling that hiring binge.
The slideshow below displays the top 25 retail investor-focused RIA firms ranked by their growth in the number of investment advisory representatives over the past decade, according to figures provided to Financial Planning by ISS Market Intelligence from its MarketPro Powered By Discovery Data solution. Firms such as Gladstone Wealth Partners, Wealthspire, Cerity Partners and Pathstone added the most advisors through recruiting and M&A deals.
As the best available official tracking for most firms' headcount of advisors — a title alongside "financial planners" that often causes confusion and controversy among professionals and their clients — the amount of investment advisory reps reflects employees who have registered with regulators to provide advice. Rapidly expanding firms must provide incoming advisors with a long-term home with the right mix of flexibility and service for their clients and teams.
With a lot of focus on "growing for growth's sake" and the "volume of transactions," some RIAs and other wealth management firms may forget the importance of identifying cultural and philosophical matches, succession planning and offering "the resources, support and infrastructure to grow organically moving forward," according to Penny Phillips, president of New York-based RIA firm Journey Strategic Wealth.
"The last point is the most important," she said in an email. "The only way to ensure sustainable growth is to ensure the advisor and their team, No. 1, has enough capacity to grow after joining us and, No. 2, has business development coaching and resources so that their capacity is filled with the things that generate revenue."
Beyond the right fit on both sides, other factors also play a role in the success of a new advisor or team at an RIA. For companies hiring and buying at scale, a niche client base in a particular field such as an advisory practice catering to pilots or specializing in divorce planning present some "very, very interesting ways to go about building business, and we've seen some very, very high quality advisors who have done that," said Raj Bhattacharyya, CEO of San Francisco-based Robertson Stephens.
"You have to care about planning, you have to care about investments and you have to care about technology," Bhattacharyya said in an interview. "You need to care that those are important facets of a wealth management client's experience."
Those complex aspects of incorporating new advisors come with the eye-popping numbers for many RIAs boosting their headcounts, which is only one metric for measuring the size of a firm and a figure that some say may be overblown in importance. To be sure, advisor productivity, average account size, amount of clients, assets under management or revenue and profits would create altogether different rankings. And the below list only includes firms that were registered in 2014, when they may have had very few advisors and thus more opportunity to hike their ranks by a higher percentage than peers with a larger base by that year.
Scroll down the slideshow below to see the 25 fastest-growing RIAs over the past decade based on the number of advisors. To see the list of the 25 fastest-growing RIAs based on assets under management, click here. For a look at the RIAs that expanded the most quickly without making any M&A deals, follow this link.
The data for the below rankings comes entirely via ISS Market Intelligence from its MarketPro Powered By Discovery Data solution, which gathered the figures through Form ADV filings with the Securities and Exchange Commission. After screening the filings to reflect companies that fit the "Best Retail" filter in terms of the mix of clients, assets and other characteristics reflecting a focus on retail wealth management services, the company compared each companies' number of representatives registered with state securities regulators as investment advisory representatives in 2014 and 2023. Excluding RIAs that launched after 2014, the following companies displayed the biggest growth in the metric during the past decade.
