Industry News

RIA giants rebound

The top 50 largest registered investment advisory firms managed $127.2 billion as of the end of the second quarter — up a sizable 16% from the end of the second quarter in 2009.

The top 50 largest registered investment advisory firms managed $127.2 billion as of the end of the second quarter — up a sizable 16% from the end of the second quarter in 2009.
Moreover, the top-50 RIAs averaged close to 3,600 accounts per firm. That’s more than double the number of accounts the top firms managed in the same period last year, according to research conducted by RIA Database for InvestmentNews. Genspring Family Offices LLC, which didn’t appear on last year’s list because it didn’t meet RIA Database’s criteria, topped the list this year, beating out Veritable LP.
Despite the change at the top, the lion’s share of the top-50 RIA firms from last year’s list appear again in this year’s ranking. Those thirty-nine repeaters saw discretionary assets jump 27% from June 30, 2009, to June 30 of this year. (View the full set of rankings here.)
Then again, those 39 firms only brought on 47 more accounts over the past year — indicating that much of their growth was due to market performance.
By contrast, Geller Family Office Services LLC, the wealth management arm of Geller & Co., saw a steep decline in discretionary assets under management. The firm, which had $3.7 billion in discretionary assets under management as of June 30, 2009, had $1.7 billion as of June 30. That decline knocked the firm from seventh to 25th place on the ranking.
In March, James “Jamie” McLaughlin, chief executive of Geller Family Office Services, left the firm after only seven months.
“The decline is attributable to a strategy to diversify clients’ assets utilizing other managers to manage portions of their portfolios, while Geller maintains overall oversight of the assets,” a representative of Geller said, adding that during the relevant period, Geller has increased the number of clients and has not had any decrease in the amount of capital it oversees for clients.
One firm that continues to move up the list of top RIAs is Luminous Capital LLC, which had $2.8 billion as of June 30, up from $2 billion at the end of the second quarter last year. Luminous was formed in May 2008 by five Merrill Lynch & Co. Inc. brokers. The firm currently has 1,417 discretionary accounts, up from 1,120 at the end of 2008, according to RIA Database. “This is an argument for breaking away from big firms because they keep adding assets every quarter,” said Julie Cooling, founder and president of RIA Database.
Rob Skinner, a partner and one of the founders at Luminous, said the firm’s growth has exceeded expectations. He attributes part of the firm’s success to the fact that he and the rest of the team invest alongside their clients. “We weren’t allowed to do that at the bank,” he said. “Now they know we have skin in the game.”