fa ’ s 2022 ria survey and ranking
Through May , we ’ ve seen 93 deals in our reporting , which is up 29 %, largely because you ’ re seeing smaller transaction activity , but even the client AUM is up 12 % to $ 135.2 billion .
— ScoTT SlATer , M & A specialist VP of practice management and consulting Fidelity Institutional now a candidate ’ s market , regardless of the industry . As we have continued to place focus on growth and look to add advisors and talent at the HQ level , we are experiencing this extremely competitive market firsthand . We have noticed that candidates are receiving multiple offers , and as the talent pool shrinks , compensation is more aggressive .”
With their lives destabilized by the pandemic , clients have become more demanding about holistic advice . That means firms have had to add services to make their relationships stickier .
Several executives interviewed by Financial Advisor say that there ’ s been no fee or margin pressure in the RIA space of the sort the broker-dealer and investment management industries have faced . But margins are under pressure because RIA firms are being asked by clients to stuff more services into their bundle : Tax prep . Estate planning . Trust planning . Healthcare services . If you can ’ t buy these services from third party vendors , you might have to merge with them . Deb Wetherby ’ s firm Wetherby Asset Management merged with Laird Norton Wealth Management ( a deal announced in February ) in a partnership of equals , forging a $ 15 billion firm . The deal was partly done , Wetherby says , so her firm could add services such as a trust department and philanthropy help ( as well as build scale ).
“ As the talent market gets more competitive , you have to be able to retain your team ,” she says . “ Doing that requires more than just compensation . For us that whole thing was motivated by a recognition that having a little more scale would help and being able to offer more to clients , whether it ’ s in philanthropy or trust services or wealth planning or investment management . Clients are really going to love that .”
A lot of firms are desperate for talent , Wetherby says . She hired a firm to do an outside study and found that people are looking for 30 % to 50 % bumps in their base salary for lateral moves , when it ’ s usually 10 % or 15 % for the same job . That ’ s big when people are the biggest line item — usually 75 % to 80 % of a firm ’ s expenses . And it can especially hurt for firms with simple AUM fee structures that don ’ t also mix in some retainer models , she says .
Chris Zander , the president and CEO of Evercore Wealth Management and Evercore Trust Co . in New York , says his firm ’ s trust offering has been a key element to its growth strategy and the attraction of talent to the firm , since trust services are a critical component to every family in the ultrahigh-net-worth category , those with $ 10 million or more . “ You ’ ll see that firms doing lots of acquisition are starting to add that component , which we not only have , but across our footprint .”
Zander maintains that if you ’ re delivering in a comprehensive way with wealth management and trust services , beyond investment management ,
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