Methodology: Best-In-State Wealth Management Teams 2023

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Why use a wealth advisor just to invest money?

Everyday wealth advisors seek to add value for the families they serve—in turn, cultivating deeper and deeper relationships. And as families bring their advisors deeper into the complexities of their lives, the top advisors are responding with teams of specialists to provide tailored service.

The service offerings are lengthy, including: wealth transfer strategies, liability management, charitable giving, concierge services, geriatric services, high-end reporting, family governance, career planning, family meeting coordination, family education. And, oh yeah, investment strategy and implementation.

Best-In-State

Our national rankings (Top Advisors, Top Teams, etc.) are published annually, but they don’t tell the whole story: most of these advisors and teams are concentrated around the bigger money centers such as New York and San Francisco. We’ve uncovered great advisors in all markets—Alabama, Iowa, and other states with smaller concentrations of wealth.

It is our belief clients are oftentimes better served by local representation. For example, a Houston-based investor who made her fortune in oil may prefer a local advisor with experience in that sector; a tech entrepreneur may want an advisor well-versed in start-ups and funding; or a farmer may seek an advisor with expertise in the futures markets. Many of the clients we talk to say they consider their advisors and teams like a part of their families, so it’s nice to have them close by.

Seeking the Best Wealth Management Teams

Where does one begin to search for the right team?

MORE FROMFORBES ADVISOR

SHOOK is here to help. As the world’s only advisor research firm in the world with a specialty in quality, SHOOK performs deep due diligence as the basis for its rankings.

Disclosure: SHOOK is completely independent and objective and does not receive compensation in exchange for placement on its rankings.

What Qualities Does SHOOK Look For?

To start, existing rankings of advisors and teams focus solely on numbers—total assets under management, revenues, headcount, etc. But how does it help knowing that one team makes more money than another?

Teams have become highly specialized and are focusing more on particular client types in order to offer the most bespoke service. This requires a close examination of the entire team, from its purpose (not just the mission) to its culture and skillset. In other words, the effort involved in analyzing one team becomes exponential compared to evaluating a single advisor. So we tweaked our methodology and broadened our process, such as expanding the number of individuals per team that we interviewed (this occurs by telephone, virtual and in-person).

When we meet with these teams, which are starting to look more like stand-alone businesses, we take a close look at leadership and the senior principals since they tend to dictate every client’s experience from the top down. Every time we meet with a team or an individual advisor for a due diligence meeting, we are always thinking to ourselves, “Would we recommend this team (or individual) to a friend or family member?” Quality is always first: if we’re going to include a team (or advisor) on our rankings, we have to make sure everyone is of the highest quality.

High Net Worth & Private Wealth Teams

Because different wealth levels tend to require different types of services, wealth management broadly categorizes between high net worth and private wealth. For the purposes of our rankings, high net worth teams focus primarily on households with accounts under $10 million—at least to start; however, these teams are entirely competent to work with far more affluent clients and most do. Private wealth teams generally focus on households with accounts at $10 million and above, even though their account minimums may be far lower, and that there is typically no minimum for related household accounts, such as children.

Ranking Algorithm

The Forbes ranking of America’s Top Wealth Management Teams, developed by SHOOK Research, is based on an algorithm of qualitative criteria, mostly gained through telephone, virtual and in-person due diligence interviews, and quantitative data. This qualitative criteria focus on studying each team’s best practices—service models, investing process, team construct, skill sets, etc. The algorithm also weighs factors like revenue trends, assets under management, compliance records. Portfolio performance is not a criterion due to varying client objectives and lack of audited data. Neither Forbes nor SHOOK receive a fee in exchange for rankings.

(For the full list and more, visit Best-In-State Wealth Management Teams; advisors can complete a survey for upcoming rankings at www.SHOOKresearch.com.)

Research Summary (as of January 2023)

We don’t want 300,000 nominations so we set thresholds to minimize the quantity we receive:

  • 37,846 advisor nominations received
  • 8,000 team nominations received
  • 16,754 total telephone interviews
  • 3,391 total in-person interviews at advisors’ locations
  • 1,357 total virtual interviews

The SHOOK Process

SHOOK scours the financial services industry for nominations. SHOOK accepts advisors who meet pre-determined minimum thresholds and acceptable compliance records. As of this date, SHOOK has received nearly 37,846 nominations—advisors who meet SHOOK’s thresholds.

Unlike other advisor rankings, SHOOK is not a “robo-ranker”—numbers such as production and assets don’t tell the whole story, especially when much of the data is self-reported. SHOOK Research creates rankings of role models—teams that are leading the way in offering best practices and providing a high-quality experience for clients. A focus on both quantitative and qualitative factors, including telephone and in-person meetings, is imperative.

SHOOK Research is the only ranking firm that interviews teams and advisors via telephone and in person at the firm’s location.

Basic Requirements

  • Minimum of 7 years as an advisor for at least 1 team member
  • Fully operational as a team for a minimum of 1 year
  • Completion of online survey
  • Over 50% of business must be with individuals
  • Acceptable compliance record

Quantitative Metrics

  • Revenue/production; weightings assigned for each
  • Assets under management – and quality of those assets – both custodied and a scrutinized look at assets held away
  • Client-related data, such as retention rates
  • Portfolio performance is not a factor; audited returns among advisors are rare, and differing client objectives provide varying returns

Qualitative Metrics

  • Telephone, virtual and in-person meetings with teams (if an in-person meeting cannot be accomplished, exceptions are considered in which the interview will occur after a ranking has been published).
  • Compliance records. Some “dings” can be overlooked (e.g., firm or product failure beyond the scope of an advisor’s due diligence; the older a ding, the less we look). Since there are many gray areas, the SHOOK team is willing to listen to a firm that is willing to stand behind the advisor with written support.
  • Teams that provide a full client experience: service model; investing process; fee structure; breadth of services (e.g., liabilities and other wealth management services)
  • Credentials (years of service can serve as proxy)
  • Use of team and team dynamics
  • Community involvement
  • Discussions with management, peers, competing peers

U4/Compliance Issues

The following conditions will be considered in order to lessen weightings for infractions:

  • Infractions that are denied or closed with no action
  • Complaint arose from a product, service or advice initiated by a previous advisor or another member or former member of team
  • Length of time since complaint
  • Complaints related to product failure not related to investment advice (some limited partnerships, adjusted-rate securities, etc.)
  • Complaints that have been settled (must be proven) to appease a client who remained with the advisor for at least one year following settlement date
  • Complaints that are proven to be meritless
  • Actions taken as a result of administrative error or failure by firm

Once an advisor’s compliance rating falls into a tenable category, the following conditions must be met:

  • An advisor’s rating must be among SHOOK’s highest qualitative measures including in-person interview
  • Letters of recommendation

Ranking Algorithm

The algorithm is designed to fairly compare the business practices of a large group of teams based on quantitative and qualitative elements. Data are weighted to ensure priorities are given to dynamics such as preferred “best practices,” business models, recent business activity, etc. Each variable is graded and represents a certain value for each measured component. These data are fed into an algorithm that measures thousands of teams against each other.

SHOOK Disclosures

SHOOK is completely independent and objective and does not receive compensation from the advisors, Firms, the media, or any other source in exchange for placement on a ranking. SHOOK is funded through conferences, publications and research partners. Since every investor has unique needs, investors must carefully choose the right advisor for their own situation and perform their own due diligence. SHOOK’s research and rankings provide opinions for how to choose the right financial advisor and not indicative of future performance or representative of any one client’s experience. Portfolio performance is not a criterion due to varying client objectives and lack of audited data. Remember, past performance is not an indication of future results.

For more information, please see www.SHOOKresearch.com.

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