The fastest-growing registered investment advisory firms delivered impressive growth in the past year, despite the losses sustained by stocks and bonds in 2022, according to a new study.
A group of 100 RIAs identified in an analysis from earlier this month by financial advisor lead generation and client matchmaking service SmartAsset boosted client accounts by an average of 52% and assets under management by a mean of 25%. The same firms, the top 25 of which are ranked in the slideshow below, more than tripled their accounts and AUM in the past three years, the firm said.
SmartAsset left out any RIAs that made an acquisition of any kind over that span — eliminating the dealmakers amassing AUM by folding in more advisory firms each year. With the number of Securities and Exchange Commission-registered RIAs reaching a record of more than 15,000 advisory firms last year, metrics tracking organic growth outside of market impact remain a key indicator of a firm's value among an expanding pool of potential investors, according to Brandon Kawal, a principal with management consulting and transaction advisory company Advisor Growth Strategies.
"The baseline definition of organic growth is net of market asset growth (deposits minus withdrawals)," Kawal said in an email. "This is the proxy that sophisticated investors and operators use to measure the true growth of any RIA."
Potential investors are seeking to locate firms displaying consistent escalation in size with the potential to accelerate in the future, Kawal noted. In the absence of organic growth, client withdrawals could hamper firms in the long run.
"Without organic growth, all RIAs and wealth management businesses will shrink," Kawal said. "This is because end investors need to spend their money at some point. The industry will see net withdrawals from existing clients without strong market returns."
Scroll down the slideshow to see the 25 fastest-growing RIAs. For last year's list, click here. And follow this link for the latest industry snapshot of RIAs.
Note: The rankings and all of the data come from an analysis of Securities and Exchange Commission Form ADV filings by SmartAsset. The firm ranked SEC-registered RIAs in the U.S. based on the growth in their client accounts and assets under management between 2020 and 2023. SmartAsset's analysis excluded firms with less than $500 million in AUM, those that made an acquisition or got purchased in the past three years, companies with disclosures on their records and RIAs that do not offer financial planning services.
