FTSPECIALREPORT FT400 · 2017. 10. 24. · Reporter,FundFire MarianaLemann Seniorreporter,FundFire...

FT SPECIAL REPORT

FT 400Top Financial Advisers

Industry finds new expertiseHigh turnover on FT400 list shows howdifficult the past year has been for advisers

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Thursday March 31 2016 www.ft.com/reports | @ftreports

Inside

How to avoid thewrong adviserMany have badrecords, so researchon them is vitalPage 3

Time to woo theonline followersTwitter or LinkedIncould be a route toasset growthPage 5

Robo-advisers getfrosty receptionBut despite the slowuptake, some cansee their potential1

Bonds confoundforecasters againCan yields pushfurther into negativeterritory?Page 12

Spouses and taxesThe wealthyneedadviceon it allPage 13

Ethical funds enjoyjump in inflowsPositive news onreturns has helpedtheir public imagePage 13

2 | FTReports FINANCIAL TIMES Thursday 31 March 2016 FINANCIAL TIMES Thursday 31 March 2016 FTReports | 3

FT 400 Top Financial Advisers FT 400 Top Financial Advisers

ContributorsLoren FoxDirector of research, Money-MediaDanielle VerbriggheReporter, FundFireEmile HallezReporter, IgnitesRachael LevyHedge fund reporter, FundFire AltsMatthew BeatonReporter, IgnitesRobin WigglesworthUS markets editor, FT

Michael ShagrinReporter, FundFireMariana LemannSenior reporter, FundFireTom StabileAssociate managing editor,FundFire AltsRita Raagas De RamosUS research manager,Ignites ResearchRichard HendersonAssociate editor, FundFire

Emma BoydeCommissioning editor

Steven BirdDesigner

Alan KnoxPicture editor

Neil LeslieIllustrator

For advertising details, contact:Dennis Asselta, + 1 917 551 5157 [email protected], or your usualFT representative.

All editorial content in this report isproduced by the FT. Our advertisershave no influence over or prior sightof the articles.

All FT Reports are available at:ft.com/reports

Customers risk being duped,or at the very least receivingpoor service, if they fail tocarry out research on a finan-cial adviser before placingtheir investments with him orher,arecentreportconfirms.

According to a workingpaper by professors from theUniversity of Chicago BoothSchool of Business and theUniversity of Minnesotareleased in early March, about7percentofUSfinancialadvis-ers had a past history of mis-conduct.

The study found that prioroffenders were five times morelikely to engage in additionalmisconduct than the averageadviser.

The researchers definedmisconduct as disclosuresrelated to terminations ofadvisers’ contracts after alle-gations,regulatory,criminalorcivil final dispositions, andcustomer disputes that wereeither settled or resulted in anawardor judgment.

So how should investors goabout their selection process?To begin with, says Scott Tiras,a financial adviser atAmeriprise Financial, “youdon’tpickthefirstperson”.

Before entering a relation-ship with an adviser, it isimportant to have a clearunderstanding of what fees arebeing paid to the adviser, tothe adviser’s firm and tothe underlying investment

managers, says Brett Bartman,anadviseratRBCWealthMan-agement:“Anyonewhodoesn’twant to provide completetransparency, I would nothire.”

Some advisers operate on afee-only basis, charging anasset-based or flat fee forinvestmentadvice.

In contrast, under a com-mission-based relationship,brokers are paid commissionsfor selling products to clients.Many advisers operate in ahybrid capacity, offering fee-based investment advice insome cases and sellingproducts for commission inothers.

Some advisers operateunder a fiduciary standard,which requires them to act intheir clients’ best interest,while others operate under asuitability standard whichrequires them to offer invest-ments thataresuitable.

An adviser should also bewilling to disclose all conflictsof interest,MrTirassays.

“The client always needs tofeel like the adviser is puttingtheir interest first,” Mr Tirassays. “If there are conflicts,

those conflicts need to be dis-cussedupfront.”

While doing their research,investors may also want toevaluate an adviser’s exper-tise. Credentials such as theCertified Financial Planner(CFP), or Chartered FinancialAnalyst (CFA) are notrequired for financial advisers,but they can show a commit-ment to gaining the right skills.

When in doubt, investorscould benefit from bringing ina third party to review thefinancial adviser’s investmentproposal, Mr Bartman says.Attorneys and accountantscan be helpful outsideresources,headds.

To safeguard against mal-practice, investors can checkto see whether an adviser islicensed and also learn aboutpast regulatory problems orclient complaints using freedatabases. The FinancialIndustryRegulatoryAuthority(Finra) has a website thatallows investors to check abroker’shistory.

The Secur i t ies andExchange Commission’s web-site also contains informationon investment adviser

representatives. The NorthAmerican Securities Adminis-trators Association (Nasaa)website directs investors tostatesecuritiesregulators.

These resources can showwhether an adviser has beennamed in regulatory actions,has been fired because of his orherconduct, is subject toclientcomplaints, or has sufferedpersonal bankruptcies orother legal issues. Checking allthree can often give the fullestpicture of an adviser’s regula-toryandcompliancehistory.

Looking at past disciplinaryrecords does not always tellthe full story, but can helpinvestors avoid advisers whomight be risky to deal with, MrBartman says. “[A search ofregulators’ databases] is notalways a perfect indicator ofwhat people are like, but it cer-tainly can rule out some reallybadapples,”headds.

Ignites DistributionResearch, the Financial Timessister publication that com-piled the listings, says it scruti-nised the publicly availablerecords of all the advisers inthis listing.

Some of those selected in thelist of 400 have in the pastbeen involved in regulatoryactions. However, Ignites Dis-tribution Research says it“excluded any advisers whoserecords gave cause for seriousconcern due to citationsagainst them that were eitherrepetitive or severe and recentinnature”.

Even a simple internetsearch is a good idea, advisesMrTiras fromAmeriprise.

“Putting the individual’sname into Google and seeingwhat you will find will take 10to 15 minutes and you canreally learn a lot about theindividual.”

Research is vital if clients want toensure they get the best adviceSelectionFreedatabases andinternet searchesare essential tools,writesDanielleVerbrigghe

Due diligence: the SECwebsite is one sourcefor information onadvisersChip Somodevilla/Getty

‘Anyone whodoesn’t want toprovidecompletetransparency,I would not hire’

T here appears to be noshortage of worries forAmerican investors in2016. Anxiety about thedirectionof interestrates

and concern about slowing economicgrowth in China have already lefttheir mark on US stock prices. Com-panies in the S&P 500 lost 10 per centof their value during January andFebruary only to recover most of itslosses by mid-March. Timing isclearly important.

Many investors looking to positiontheir portfolio to withstand financialshocks will be planning to seek finan-cial advice, but even the elite advisersat traditional broker-dealer firmslisted inthe2016editionof theFinan-cial Times 400 Top Financial Advis-ers will be struggling to make therightchoices for theirclients.

For example, if they had recom-mended decreasing exposure tobonds in the early part of the yearthey would have been caught out.Market turmoil led to a forecast-bust-ing rally in the bonds of manyadvancedeconomies.

An indication of the challenges fac-ing financial advisers can be gained by comparing the FT 400 list thisyear with last year’s. While the FT400 typically sees one quarter of itsnames turn over from year to year,this time just half of 2015’s list ofadvisersreturned.

The FT400 research team at theFinancial Times’s sister publication,Ignites Distribution Research,believes that the high turnover indi-cates many advisers made poorinvestment choices last year. Theresearchers decided to raise the mini-mum qualifying amount of assetsunder management (AUM) from$200m to $300m on the grounds thatthis is an important criterion of suc-cess. But as that change would haveaffected only five per cent of adviserson the 2015 list, many other adviserslostmoneyandorclients.

As in the three previous FT 400

lists, the research team used a combi-nation of brokerage data, surveyresponses from advisers and its ownresearch to score the candidates onattributes such as AUM, AUM growthrate,anddepthofexperience.

The methodology is explained fullyin a separate article published withthe listof400(Page10).

In addition to sound knowledge ofmarkets, financial advisers faceincreasing demands for exposure toalternative strategies, such as hedgefunds and socially responsible invest-ments.

Meanwhile, advisers at the biggestbrokerages are seeing early signs ofcompetition from so-called robo-ad-visers that offer automated advice atlow cost. And the US Department ofLabor’s proposal of more stringentregulations on retirement plan adviceand conflicts of interest could have animpactonrevenuesatsomefirms.

The researchers used AUM figureswhich they verified with the broker-ages’ head offices. Advisers’ commit-ment to their professional develop-ment was recognised with the awardof bonus points for having earned anyof the top industry certifications suchas the Chartered Financial Analyst orCertified Financial Planner (CFP). Inthe end the team found that 60 percent of the FT 400 advisers have atleastoneof thesecredentials.

With so many investors now rely-ing on the internet and social media,advisers were awarded points formaking their information easilyaccessible online. Indeed, 86 per centof FT 400 advisers are onLinkedIn, up from 70 per cent in2015’s listing. And 95 per cent of FT400 advisers have websites, up from84percent lastyear.

The list is presented as a groupingof 400. There is no attempt torank the advisers within the listbecause researchers felt the criteriacould not be precise enough to sepa-rate, for example, the 200th-bestadviser from the 201st. Many missed

the listingbyonlyaveryslimmargin.The Financial Times 400 is listed

state by state and, not surprisingly,the larger and/or wealthier statesaccount for more advisers on the list.This fourth annual edition of the FT400 lists advisers from 38 states plusWashington DC. California and NewYork are tied with the greatestnumber of FT 400 members, eachaccounting for 13 per cent of the total.Massachusetts, Texas, Florida andIllinois, in descending order, are thenextmostrepresentedstates.

The team found the medianFT 400 adviser manages more than$1bn in assets, compared with $850min 2015’s list. Despite challengingmarkets, FT 400 advisers in thisyear’s list, which is based on data forthe year ending September 30 2015,saw their assets under managementgrow by 11 per cent over the previous

year, and by 32 per cent compared totwoyearsearlier.

FT 400 advisers have been in thebusiness for an average of 26 years.Some69percentofFT400havebeenadvisers for at least 22 years, whichmeans they were managing invest-ments in 1994, the worst single yearfor the US bond market in the past four decades. As uncertainty in thebond market continues, such first-hand experience could proveextremelyvaluable.

In keeping with the trend towardsspecialisation in wealth manage-ment,89percentof theFT400advis-ers work in teams — that was up from84 per cent of the advisers in the 2015survey. Looking at the list highlightsjust how many advisers focus on thewealthiest investors as clients, a shiftencouraged by their brokerage firms.Some 84 per cent of the FT 400 serve

Marketturmoil addsto industry’sdifficulties

Advisers face financial uncertainties andcompetition, says Loren Fox

wealthy investors — those with $1mto $10m in investable assets. How-ever a greater proportion — 94 percent — serve very wealthy investorswithmorethan$10mtoinvest.

While FT 400 advisers share manycommontraits, there isplentyofvari-ety in the group. The majority of theadvisers come from the largest bro-ker-dealer firms,but inall theyrepre-sent 19 different brokerage firmsfromacross thecountry.

The advisers also reflect differentspecialisations — from the 8 per centwho make a point of targeting scien-tists to the 28 per cent with expertisein trusts and estates. Individualadvisers might, therefore, disagreeabout the implications of oil pricemovements or the future of China,but as a group they embody enoughdiversity to satisfy most investors’ambitionsandaspirations.

94 per cent serve verywealthy investors withmore than $10m


FT 400 Top Financial Advisers

Todd Feltz says he owes his successto timing. The adviser, who oversees$1.8bn in clients’ funds, foundedFeltz WealthPlan in 1989.Mr Feltz, 56, says he launched his

business, which is based in Omaha,Nebraska, soon after Americansfaced changes to tax legislation thataffected individual retirementarrangements (IRAs) and employer-sponsored 401(k) schemes, now thebread and butter of many USretirement plans.WealthPlan, part of LPL Financial,

now has around 2,500 accounts, buthad humble beginnings.Mr Feltz says he built recognition

for his business by sharing financialtips on nationally syndicated radioand the noontime television news in

Omaha. “That’s the backbone ofhow we got started and raised a lotof assets,” he says.To cope with market crises, Feltz

WealthPlan looks for strategies thatmitigate risk. Feltz has tended tomove client assets into alternativestrategies, including private equityand hedge funds, as well as variableannuities, structured notes andfunds that can move into cash.These methods have helped

preserve client capital, he says.Client portfolios may not make asmuch during bull markets, but theyalso lose less during downturns.“We’re not trying to outsmart the

markets,” he says. “We’re trying tomanage the risk and the pull backs.”Feltz WealthPlan provides clients

with daily cash flow reports andaims to keep investors updated onprogress and financial goals,allowing them to understand howand when they will be able to retire.“We don’t want there to be anysurprises,” Mr Feltz says.Today, the firm’s customers tend

to be doctors, entrepreneurs andsmall business owners — a nicheclient base which has also helpedthe firm work more efficiently. About20 per cent of clients are retirees, hesays.Mr Feltz’s firm separates its teams

into three areas: client services,financial planning and moneymanagement.Rather than having advisers

juggle marketing, account

management, and various otheradministrative duties, this division oflabour allows employees to excel intheir respective areas, he says.“We have the money management

team because of the consistencythey can deliver and the due

diligence they’re able to dedicatetheir time to, whereas the individualadviser running an office by himor herself doesn’t have the timeto do that research,” he says.Mr Feltz employs seven advisers

in-house and 36 outside the firm.About half of the outside adviserstake advantage of the firm’s moneymanagement research, he says.This delivers a common approach

in how clients’ money is managedand also makes it easier tocommunicate with customers, hesays.“This way, you don’t have 45

advisers picking stocks and fundsand having assets invested athousand different ways.Rachael Levy

Profile Home-grown research helps deliver consistency in how clients’ money is managed across a large team

Todd Feltz: trying to manage risk

M ichael Kitceshas more thanquadrupled hisannual incomeover the past

four years — a developmentthe financial adviser attributeslargelytohisuseofTwitter.

Mr Kitces is a partner at Pin-nacle Advisory Group which isbased in Columbia, Maryland,and he spends a few minutesseveral times a day scanningthe social media platform fornews, composing tweets andrespondingtomessages.

He has built a follower baseof more than 28,000. Many ofthese users keep tabs on hisaccount for links to financialarticles and some have turnedintoclients.

“I actually spend less timewith clients than I used to,because it’s growing businessso much that I can delegate cli-ents to other advisers in ourfirm,” says Mr Kitces, whosebusiness now oversees about$1.8bn in assets. He says itwould be hard to imagine abetter way of building an advi-sorybusiness.

MrKitces is far fromalone inusing social media to win overclients. A survey of more than800 financial advisers in 2015by Putnam Investments foundthat 81 per cent of those

questioned used social mediafor business, up from 75 percent in 2014. Among thosewho used social media forbusiness last year, 79 per centreported gaining new clientsthrough the medium, com-pared with 66 per cent in 2014.Over half of those surveyedsaid they had gained over $1min client assets under manage-ment.

But simply maintaining anactive presence on socialmedia is not enough. Mr Kit-ces, for example, dedicatesmuch more time to producingcommentary for his blog,Nerd’sEyeView.

He says relying on tweetsalone to increase your cus-tomer base will not work. “Ifthat is your social media strat-egy, you are almost certainlygoing to fail,” he says. “A well-designed website with high

quality content is what actu-ally converts people into cli-ents.”

Mark McKenna, Putnam’shead of global marketing, saysTwitter is more commonlyemployed to establish anadviser’s brand image,whereas LinkedIn is used forimmediatenetworking.

LinkedIn has its own pros-pecting function,SalesNaviga-tor, which allows advisers tosearch for potential clients,addsMrMcKenna.

According to Putnam’s sur-vey, 70 per cent of advisers useLinkedIn, 47 per cent areactive on Facebook and 42 percent have Twitter accounts. Ofthose who generated new busi-ness through social media, 88per cent reported having doneso via LinkedIn, 68 per centthrough Facebook and 64 percentbywayofTwitter.

Advisers who use socialmedia successfully tend to bal-ance the financial informationthey post with more personalinformation, Mr McKennasays.

Mr Kitces agrees. “There hasto be some mixture,” he says.“People don’t want to connectwith an article-tweetingrobotic automaton — peoplewant to connect with otherhuman beings. Your personal-ity has to show through atsomepoint.”

Making an online connec-tion with investors seems to beevermore important.Asurveyof investors conducted inDecember by the FinancialPlanning Association andLinkedIn found that over halfof respondents aged between18 and 44 perform an onlinesearch for an adviser beforemaking contact with them.

Also, 10 per cent did onlinesearches of the adviser’s socialprofiles after meeting thembut before deciding whether ornot tohire them.

More than two-fifths ofpotential clients in this agebracket, which is highlyskewed towards use of socialmedia, said that an adviser’sonline profile was “important”or “critical” to their decision-makingprocess.

This trend is leadingadvisers to share content,such as papers they haveauthored, more freely, saysJulie Littlechild, founder ofconsulting firm AbsoluteEngagement.

“The pay-off is probablylargely through supportingreferral efforts and creatingcredibility,” Ms Littlechildsays. “It’s a slow-growingtrend. It’s something that’scompletely different in terms ofastrategy.”

Mr Kitces says many advis-ers flounder because they giveup before allowing enoughtime to build up a strong baseof online connections or fol-lowers. It can take years toamass thousands of followers,he says. But when those highnumbers are achieved, theeffect on an adviser’s reach canbeprofound.

“It takes me the sameamount of time and effort tomake an article and send atweet for 30,000 followers as it[once] did for 300,” he says.“Your time investment is thesame, but the returns get bet-ter and better, the longer youdoit.”

Time to woo the online followers

Gaining followers: but if youwant to win customers,do not rely only on tweetsChris Ratcliffe/Bloomberg

‘People want toconnect with otherhuman beings. Yourpersonality has toshow through’

Social media

The internet offershuge potential forattracting clients,writes Emile Hallez


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Client segments served

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ALABAMA

Duncan, Jerry G. UBS Financial Services Birmingham X X X

Smith, Tony R. UBS Financial Services Birmingham X X X

ARIZONA

Gale, S. Christopher Merrill Lynch Wealth Management Scottsdale X X X X

ARKANSAS

Winburn V, Hardy L. UBS Financial Services Little Rock X X X

CALIFORNIA

Abrams, Michael L. Wells Fargo Advisors, LLC Palo Alto X X

Arbogast, Peter Merrill Lynch - Private Banking & Investment Group San Francisco X

Bartman, Brett RBC Wealth Management Beverly Hills X X X

Basch, Andrew Morgan Stanley Private Wealth Management Los Angeles X X X

Binder, Mark N. UBS Private Wealth Management Los Angeles X X

Blanchfield, Tom Merrill Lynch - Private Banking & Investment Group Newport Beach X X

Bolander, Ivar J. Morgan Stanley Wealth Management Santa Rosa X X

Bubb, Kerrick W. KWB Wealth Managers Group Redlands X X X

Burbank, Mike Morgan Stanley Private Wealth Management San Francisco X X

Burford, Lon E. Royal Alliance Sacramento X X X X

Chopra, Ash Merrill Lynch - Private Banking & Investment Group San Francisco X

Curtis, Mark T. Graystone Consulting Palo Alto X X X

daRoza, Tony Merrill Lynch - Private Banking & Investment Group San Francisco X X

Freides, Drew S. UBS Private Wealth Management Los Angeles X X X

Friedman, Mark UBS Private Wealth Management San Francisco X

Gallo, Robert F. Merrill Lynch Wealth Management Walnut Creek X X X X

Garcia, Jennifer Leigh Wells Fargo Advisors, LLC Encino X X

Genovese, Michael T. Royal Alliance Sacramento X X X X

Gray, Eric A. Merrill Lynch - Private Banking & Investment Group Los Angeles X

Green, Rick Wells Fargo Advisors, LLC Los Angeles X X X X

Hartl, Philippe M. Merrill Lynch - Private Banking & Investment Group Los Angeles X X

Jackson, Dana Graystone Consulting Menlo Park X X X

Jones, Richard B. Merrill Lynch - Private Banking & Investment Group Century City X X

Jorgensen, Debbie Merrill Lynch Wealth Management San Francisco X X X

Kanigher, Michael D. UBS Private Wealth Management Los Angeles X X X

Kelly, Inna L. Morgan Stanley Wealth Management San Francisco X

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Klein, James R. Morgan Stanley Private Wealth Management Los Angeles X X

Kothari, Sonny S. Merrill Lynch Wealth Management Brea X X

Krenzin, Randy Wells Fargo Advisors, LLC San Jose X X X

Malone III, Francis X. Morgan Stanley Private Wealth Management Los Angeles X X X

McClellan, Ryan A. UBS Private Wealth Management Los Angeles X X X

McGrouther, David B. Morgan Stanley Wealth Management Menlo Park X X X

McWhorter, Richard Merrill Lynch - Private Banking & Investment Group Los Angeles X

Miller, Martin Ameriprise Financial San Carlos X X X X

Minkoff , Steven M. Ameriprise Financial San Francisco X X X

Pence, Laila Pence Wealth Management Newport Beach X X X

Pfeff erman, Darren A. Morgan Stanley Private Wealth Management San Diego X X X

Piepenkotter, Monica Merrill Lynch - Private Banking & Investment Group La Jolla X X X

Richards, Perry S. Merrill Lynch Wealth Management Beverly Hills X X X

Rothstein, Rebecca S. Merrill Lynch - Private Banking & Investment Group Beverly Hills X X

Schirripa, Joseph J. UBS Financial Services Beverly Hills X X X X

Schulten, Mark The Schulten Group of Wells Fargo Advisors, LLC Long Beach X X X X

Shadden, John T. Morgan Stanley Private Wealth Management Long Beach X X X

Smith, Lawrence E. UBS Financial Services Brea X X X X

Vaughan, Gregory V. Morgan Stanley Private Wealth Management Menlo Park X X

Walters, Philip S. Wells Fargo Advisors, LLC Beverly Hills X X

Weaver, Jason M. Ameriprise Financial Huntington Beach X

Weber, Steven J. Morgan Stanley Private Wealth Management Los Angeles X X

Wolfslau, Karl Morgan Stanley Wealth Management Long Beach X X X X

Wong, Jack Morgan Stanley Wealth Management Mountain View X X

Young, Cheryl L. Morgan Stanley Wealth Management Los Gatos X X X

Zafari, Reza Merrill Lynch - Private Banking & Investment Group Century City X X

Zanolli, Greg Wells Fargo Advisors, LLC Roseville X X X

COLORADO

Di Ianni, Donna M. Merrill Lynch Wealth Management Aspen X X X

Dodds, Andrew T. Dodds Wealth Management Englewood X X

Fowler, Shawn P. Morgan Stanley Private Wealth Management Denver X X X

Hoover, Carl R. Merrill Lynch Wealth Management Denver X X X

CONNECTICUT

Erdmann III, John (Jeff ) F. Merrill Lynch - Private Banking & Investment Group Greenwich X X X

* High net worth (clients with $1m-$10m in investable assets), ** Ultra high net worth (clients with $10m or more in investable assets)


The FT Top Financial AdvisersBest in classWepresent the leadingUS professionals, listed by state, and provide the researchmethodology



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Gourd, William C. UBS Private Wealth Management Stamford X X

Greco, William J. UBS Financial Services Hartford X X X

Mattson Kenworthy, Mary UBS Private Wealth Management Stamford X X

McElroy, Abby Wolman RBC Wealth Management Westport X X X X

Somberg, Matthew A. Gottfried & Somberg Wealth Management, LLC Glastonbury X X X

Spitzbard, Kenneth SagePoint Financial Branford X X X X

DISTRICT OF COLUMBIA

Apton, Keith UBS Financial Services Washington X X

Haff ner, Barry M. UBS Financial Services Washington X X

King II, James J. Merrill Lynch - Private Banking & Investment Group Washington X X X

Nelson, Wayne Merrill Lynch Wealth Management Washington X X X X

Ross, Steven S. RBC Wealth Management Washington X X

Slater III, William R. Merrill Lynch - Private Banking & Investment Group Washington X X X

Walker, Dexter Mead Morgan Stanley Private Wealth Management Washington X X X

Williams, John M. Morgan Stanley Private Wealth Management Washington X X X

FLORIDA

Aitken, Christopher C. Merrill Lynch - Private Banking & Investment Group Ponte Vedra X X X

Applewhite III, Eric L. Morgan Stanley Wealth Management Boca Raton X X X

Barcena, Ignacio A. Wells Fargo Advisors, LLC Miami X X X

Barnes, John C. RBC Wealth Management Naples X X X

Chiavacci, Louis J. Merrill Lynch - Private Banking & Investment Group Coral Gables X

Clarke, Peter J. BB&T Scott & Stringfellow Palm Beach X X X

Cogan, Aimee Morgan Stanley Wealth Management Sarasota X X X

Dwyer, Patrick J. Merrill Lynch - Private Banking & Investment Group Miami X

Elwaw, John Morgan Stanley Wealth Management Miami X X

Esses, Tony Wells Fargo Advisors, LLC Miami X X

Fetterman, Sean UBS Financial Services Boca Raton X X X

Gouraige, Ghislain UBS Private Wealth Management Coral Gables X

Johnson, Kevin T. Morgan Stanley Private Wealth Management Naples X X

McDonald, Jon Randal Morgan Stanley Wealth Management Boca Raton X X X

Merriam III, William H. Merrill Lynch Wealth Management Jacksonville X X X X

Moll, Todd A. Provenance Wealth Advisors / Raymond James Fort Lauderdale X X X X

Moran, Thomas M. Wells Fargo Advisors, LLC Naples X X X

Reznik, Steven P. Raymond James Tallahassee X X X X

Silverman, Mickey Raymond James Boca Raton X X

Simmons, Keith Merrill Lynch Wealth Management Miami X X X X

Stephens, Jason E. UBS Private Wealth Management Naples X X

Sylvia, Kurt F. UBS Private Wealth Management Palm Beach X X X

Viyella, Miguel A. Wells Fargo Advisors, LLC Miami X X X

GEORGIA

Frank, Brian H. Morgan Stanley Private Wealth Management Atlanta X X X

Hansberger, James C. Morgan Stanley Private Wealth Management Atlanta X X X

Harbour, Andrew Graystone Consulting Atlanta X X

Hines, Michael L. Consolidated Planning Corp. / Raymond James Atlanta X X X X

Hughes, Ron Merrill Lynch - Private Banking & Investment Group Atlanta X

Lellyett, Jr., William M. Raymond James Atlanta X X X X

Mericka, Keith A. UBS Private Wealth Management Atlanta X X X

Merlin, Michael J. Morgan Stanley Private Wealth Management Atlanta X X X

Montgomery, John UBS Private Wealth Management Atlanta X X X

Ryan, Justin P. UBS Private Wealth Management Atlanta X X

Wagner, Michael J. Morgan Stanley Wealth Management Atlanta X X

Westmoreland, Rod Merrill Lynch - Private Banking & Investment Group Atlanta X

ILLINOIS

Baldwin, Patrick Merrill Lynch - Private Banking & Investment Group Chicago X X

Bhatia, Raj Merrill Lynch - Private Banking & Investment Group Chicago X X X

Cutilletta, Patricia G. Morgan Stanley Wealth Management Chicago X X

Doerge, Jack O. Morgan Stanley Private Wealth Management Chicago X

Easom, William H. Morgan Stanley Wealth Management Chicago X X X

Joyce, John C. Morgan Stanley Private Wealth Management Chicago X

Leshem, Benjamin Hefter, Leshem, Margolis Cap Mgmt Group / Wells Fargo Advisors Highland Park X X X

Lynch, Kevin R. Morgan Stanley Private Wealth Management Chicago X X

Magnesen, Scott K. Morgan Stanley Wealth Management Oak Brook X X X

Margolis, Charles B. Hefter, Leshem, Margolis Cap Mgmt Group / Wells Fargo Advisors Highland Park X X

Meyer, Douglas L. Wells Fargo Advisors, LLC Deerfield X X X X

Oberheide, James L. Morgan Stanley Private Wealth Management Chicago X X

Pfaff , Christopher S. UBS Private Wealth Management Chicago X

Raihle, Maureen Merrill Lynch - Private Banking & Investment Group Chicago X X X

Roeser, Kathleen Morgan Stanley Wealth Management Chicago X X

Schaff er, Michael S. Wells Fargo Advisors, LLC Lake Forest X X

Schuster, Scott Dashboard Wealth Advisors / Raymond James Oak Brook X X X

Sparks, Walter L. The Brechnitz Group of Raymond James Decatur X X X

Ver Bockel, John Merrill Lynch - Private Banking & Investment Group Chicago X X X

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White, Brett D. Ameriprise Financial Oakbrook Terrace X X

Wilkinson, David M. Morgan Stanley Private Wealth Management Chicago X

Wright, David C. Merrill Lynch - Private Banking & Investment Group Chicago X

INDIANA

Cooke, Brian F. Cooke Financial Group of Wells Fargo Advisors, LLC Indianapolis X X X

Cooke, Christopher Cooke Financial Group of Wells Fargo Advisors, LLC Indianapolis X X X

Gregor, Martin Merrill Lynch - Private Banking & Investment Group Indianapolis X X X

Moore, Christopher P. Ameriprise Financial Fort Wayne X X X X

Payne, Eric Merrill Lynch Wealth Management Indianapolis X X X

Perry, John D. Morgan Stanley Wealth Management Indianapolis X X X

Stscherban, Paul Baird Mishawaka X X X X

IOWA

Boesen, Bryan Morgan Stanley Wealth Management Des Moines X X X

Swanson, Keith K. Morgan Stanley Private Wealth Management West Des Moines X X X

KANSAS

Ewing, Paul W. Prosperity Advisory Group Overland Park X X

Ferguson, Scott D. Morgan Stanley Wealth Management Leawood X X X

KENTUCKY

Donohue, Dean M. Ameriprise Financial Louisville X X X X

Foutch, Daniel J. The Foutch Group, Hilliard Lyons Glasgow X

Perrone, Thomas Morgan Stanley Wealth Management Louisville X X X X

LOUISIANA

Lewis, Jr., Tandy G. Raymond James Shreveport X X X X

Simmons, Charles L. Ameriprise Financial Metairie X X X

MAINE

Burns, Jeremiah S. Morgan Stanley Wealth Management Portland X X

MARYLAND

Baker, Gregory M. Merrill Lynch Wealth Management Bethesda X X

Baum, Patricia P. RBC Wealth Management Annapolis X X X X

Boggs, Larry D. Wells Fargo Advisors, LLC Cumberland X X X X

Eisen, Dean Graystone Consulting Potomac X X

Etergino, Ann Marie RBC Wealth Management Chevy Chase X X X

Fox, Paul M. Morgan Stanley Wealth Management Lutherville X X X

Jackson, Margaret M. RBC Wealth Management Annapolis X X X X

Kantor, Robert XML Financial Group Rockville X X X X

Meredith, Andrew F. Merrill Lynch Wealth Management Baltimore X X X X

Murray, Jonathan P. UBS Financial Services Hunt Valley X

Pakenas, Betsy Morgan Stanley Wealth Management Frederick X X X

Pearce, Kent V. Merrill Lynch Wealth Management Towson X X X

Rosenwald, Beth RBC Wealth Management Baltimore X X X

Sella, Edward Geoff rey SPC Financial, Inc. / Raymond James Rockville X X

Serenyi, Nicholas J. Morgan Stanley Wealth Management Rockville X X X

Smith, Edward (Ted) W. UBS Financial Services Baltimore X X

Tomick, Paul M. Janney Montgomery Scott LLC Towson X X X

MASSACHUSETTS

Armstrong, Christine Morgan Stanley Wealth Management Boston X

Bartholomew, Thomas J. Bartholomew & Company, Inc. Worcester X X X X

Borden, David CCR Wealth Management Westborough X X

Brede, Debra K. D.K. Brede Investment Management Company, Inc. Needham X X X X

Connolly, Jr., Richard F. Morgan Stanley Private Wealth Management Boston X X X

Corbett, L.O. Patrick Morgan Stanley Private Wealth Management Boston X X

Dillon, Sean V. UBS Financial Services Boston X X X

Finn, Daniel N. Morgan Stanley Wealth Management Wellesley X X X

Javaheri, David R. Morgan Stanley Wealth Management Wellesley X X

Joyce, Mark S. Merrill Lynch Wealth Management Boston X X

Kaplan, Susan C. Kaplan Financial Services, Inc. Newton X X

Larsen, Wyatt UBS Private Wealth Management Boston X

Marchese, Michael F. Axial Financial Group Burlington X X X X

Mason, Robert F. Morgan Stanley Private Wealth Management Boston X X

McCauley, Paul J. Merrill Lynch - Private Banking & Investment Group Boston X X

McGuirk, Gary L. Merrill Lynch - Private Banking & Investment Group Boston X

Miller, Paul E. Axial Financial Group Burlington X X X X

Miller, Richard R. Ameriprise Financial Wellesley X X

Mullin, Mary B. Merrill Lynch Wealth Management Boston X X

Nabhan, Edward G. Morgan Stanley Wealth Management Boston X X

Peckler, Maxwell D. UBS Financial Services Boston X X

Princi, Peter Graystone Consulting Boston X X X

Rumrill, Dave Morgan Stanley Private Wealth Management Wellesley X

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Sharma, Raj Merrill Lynch - Private Banking & Investment Group Boston X X X

Taylor, James W. UBS Financial Services Boston X X

Whalen, Kevin Morgan Stanley Wealth Management Boston X X

Wilson, Daniel T. Ameriprise Financial Auburndale X X X

Winthrop, Mark Winthrop Wealth Management Westborough X X X

Wolff , Jonathan C. Lightship Wealth Strategies, Inc. Newton Lower Falls X X X X

Wood, Thomas UBS Financial Services Boston X X X X

MICHIGAN

Bernecker, Scott D. Merrill Lynch Wealth Management Grand Rapids X X X X

Kruzan, James B. Kaydan Wealth Management, Inc. / Raymond James Fenton X X X X

Long, Timothy J. Merrill Lynch Wealth Management Grand Rapids X X X X

Migliazzo, Frank Merrill Lynch - Private Banking & Investment Group Troy X X

Nemes, Charles L. Nemes Rush Private Wealth Management of Raymond James Novi X X X

Sanford, Todd A. Sanford Financial Services, Inc. / Raymond James Portage X X X X

Towner, Jeff Merrill Lynch Wealth Management Grand Rapids X X

VanDyke, Kevin M. Bloomfield Hills Financial Bloomfield Hills X X X X

Veldheer, James D. Merrill Lynch Wealth Management Grand Rapids X X X X

Vigi, Jon UBS Private Wealth Management Birmingham X X

Zhang, Charles C. Zhang Financial Portage X X X X

MINNESOTA

Boyd, Christina K. Merrill Lynch Wealth Management Wayzata X X X

Brandt, Thomas J. RBC Wealth Management Wayzata X X X

Eckerline, Peter Merrill Lynch Wealth Management Wayzata X X

Macken Elliott, Martha Mayo Employees Federal Credit Union Rochester X X

Major, Charles L. UBS Private Wealth Management Minneapolis X X

Marks, Ben Marks Group Wealth Management Minnetonka X X X

Metcalf, Robert S. UBS Private Wealth Management Minneapolis X X X

MISSOURI

Ludwig, John T. Morgan Stanley Wealth Management Kansas City X X X X

Moeller, Michael L. Moeller Group of Wells Fargo Advisors, LLC Chesterfield X X X X

NEBRASKA

Feltz, Todd A. Feltz WealthPLAN, Inc. Omaha X X X X

Garlock, John (Buzz) RBC Wealth Management Omaha X X X X

Jacobitz, Andy J. RBC Wealth Management Omaha X X X X

Leinen, Scott RBC Wealth Management Omaha X X X X

Robinson, Andrew C. Morgan Stanley Wealth Management Omaha X X X X

NEVADA

Buckley, Brian J. Morgan Stanley Wealth Management Las Vegas X X

Chudd, Michael UBS Financial Services Las Vegas X X

Derhake, Michael A. Wells Fargo Advisors, LLC Las Vegas X X

Jay, Kelly K. UBS Financial Services Reno X X

Laughton, Jr., James R. Wells Fargo Advisors, LLC Reno X X X

NEW JERSEY

Andreach, Christopher M. RBC Wealth Management Red Bank X X X

Barry, James R. Merrill Lynch Wealth Management Princeton X X X X

Burke, John B. Burke Financial / Raymond James Iselin X X

Cook, Christopher G. Merrill Lynch Wealth Management Florham Park X X

Darcangelo, Devin UBS Private Wealth Management Paramus X X X

Deatherage, Mary M. Morgan Stanley Private Wealth Management Little Falls X X X

Fendrick, Mark UBS Financial Services Mt. Laurel X X X X

Finkel, David R. Merrill Lynch Wealth Management Egg Harbor Twp X X X

Gisser, Warren J. RBC Wealth Management Parsippany X X

Lichtenfeld, Mark L. UBS Private Wealth Management Florham Park X X X

Matina, Joseph UBS Private Wealth Management Short Hills X X

McLaughlin, James M. Princeton Wealth Advisors of Raymond James Princeton X X X

McPeak, Neil Wells Fargo Advisors, LLC Linwood X X X X

Micera, John P. RBC Wealth Management Florham Park X X X X

Ricca, Michael J. Morgan Stanley Wealth Management Florham Park X X X

Schwartz, Daniel S. UBS Private Wealth Management Paramus X X

Schwartz, Eric R. UBS Private Wealth Management Florham Park X X X

Walker, Ira UBS Private Wealth Management Red Bank X X

Weinerman, David Morgan Stanley Wealth Management Florham Park X X X

NEW YORK

Adamsky, Jonathan UBS Financial Services New York X X X

Bakshi, Vishal Merrill Lynch - Private Banking & Investment Group New York X X

Basu, Ron Morgan Stanley Private Wealth Management New York X X

Bianco, George Merrill Lynch Wealth Management New York X X X

Boccia, Leonard Wells Fargo Advisors, LLC New York X X

Bodner, Eric Scott Merrill Lynch - Private Banking & Investment Group New York X X X

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Canell, Jay Morgan Stanley Wealth Management New York X X X X

Canell, Neil Morgan Stanley Wealth Management New York X X X X

Cohen, Leigh Merrill Lynch - Private Banking & Investment Group New York X

Condos, Steve Morgan Stanley Private Wealth Management New York X X X

Donohue, Mark G. Morgan Stanley Wealth Management New York X X X

Dyer, Robert C. Merrill Lynch - Private Banking & Investment Group New York X

Filone, Jeff rey Morgan Stanley Wealth Management Garden City X X X

Fitzburgh, Richard A. RBC Wealth Management New York X X X

Greenspan, Richard UBS Financial Services New York X X X

Haberman, Jason Morgan Stanley Wealth Management New York X X

Halbfinger, Martin UBS Financial Services New York X X X

Hart, Andrew Morgan Stanley Private Wealth Management New York X X

Kass, Richard P. KBK Wealth Management, LLC New York X X X

Kavallieratos, Nick Morgan Stanley Wealth Management New York X X X X

Kilduff , Sean T. UBS Private Wealth Management New York X

Kingsolver, Susan L. Morgan Stanley Private Wealth Management New York X X X

Kleiner, Scott Morgan Stanley Wealth Management New York X X

Klingman, Gerard Klingman & Associates, LLC / Raymond James New York X X X

Kobernick, Jeff rey M. UBS Private Wealth Management New York X X X

Liebers, Lawrence C. Merrill Lynch Wealth Management New York X X X

Mellert, Douglas M. Merrill Lynch Wealth Management New York X X X

Naylor, Rachael Morgan Stanley Private Wealth Management New York X X

O'Connell, Daniel Merrill Lynch Wealth Management Garden City X X

Osio, Miguel G. Morgan Stanley Private Wealth Management New York X X

Papandrea, Rocco Merrill Lynch Wealth Management New York X X X X

Piniros, Fotios Morgan Stanley Private Wealth Management New York X

Poppo, Michael F. UBS Financial Services New York X X X

Rukeyser, Peter L. UBS Private Wealth Management New York X X

Salvino, Richard Merrill Lynch - Private Banking & Investment Group New York X

Sargent, John H. Morgan Stanley Private Wealth Management New York X

Sawyer, Michael Morgan Stanley Private Wealth Management New York X

Sax, Ben Merrill Lynch - Private Banking & Investment Group New York X X X

Schoff , William L. UBS Financial Services Rochester X X

Sechan II, Robert J. UBS Private Wealth Management New York X X X

Seruya, Mark Morgan Stanley Private Wealth Management New York X X X

Steden, Heliane Merrill Lynch Wealth Management New York X

Sukhin, Andrew G. Morgan Stanley Wealth Management New York X X

Sullivan, Thomas E. Merrill Lynch Wealth Management Garden City X X

Talish, Joel Wells Fargo Advisors, LLC Purchase X X

Temel, Charles S. UBS Financial Services New York X X X

Toomey, Christopher A. Morgan Stanley Private Wealth Management New York X X

Trikha, Umesh K. Merrill Lynch Wealth Management New York X X X X

Vinder, Ron J. UBS Financial Services New York X X

Weil, Noel Merrill Lynch - Private Banking & Investment Group New York X

Weilman, Charles S. Morgan Stanley Wealth Management New York X X X

Williams, Alexander D. UBS Private Wealth Management New York X X

Winik, Jeff rey Morgan Stanley Wealth Management New York X X X

NORTH CAROLINA

Cash, Gregory M. Merrill Lynch - Private Banking & Investment Group Charlotte X

Ellsweig, Erick J. Merrill Lynch Wealth Management Greensboro X X

Fisher, Rick Fisher Wealth Management Burlington X X X X

Oliver, William M. Wells Fargo Advisors, LLC Charlotte X X

Thomas, Stephen L. Linden Thomas & Co. (Wells Fargo Advisors Financial Network, LLC) Charlotte X X X

Wickham, Robert Mitchell Merrill Lynch - Private Banking & Investment Group Charlotte X

OHIO

Albach, Brian K. Morgan Stanley Wealth Management Cincinnati X X

Bowman, James A. Raymond James Bexley X X X X

Chornyak, Sr., Joseph A. Chornyak & Associates Columbus X X X X

Edwards, Brian J. Morgan Stanley Wealth Management Columbus X X X X

Ellis III, David W. UBS Private Wealth Management Cincinnati X X X X

Kastan, Bradley R. Raymond James Bexley X X X X

Myeroff , Kevin Royal Alliance Cleveland X X X

Shendure, Ashok S. BDS Financial Network Solon X X X X

Shendure, Rajanee A. BDS Financial Network Solon X X X X

Singer, David L. Merrill Lynch - Private Banking & Investment Group Cincinnati X X X

OKLAHOMA

Lehman, Donald M. Merrill Lynch Wealth Management Tulsa X X

PENNSYLVANIA

Archer, Ben UBS Financial Services Conshohocken X X

Blumenthal, Edward S. Janney Montgomery Scott LLC Philadelphia X X

Boland, Robert C. RBC Wealth Management Philadelphia X X X X

Brennan, Patricia C. Royal Alliance West Chester X X X X



In autumn 2015, the Financial Timescontacted the largest US brokeragefirms and asked them to supplyinformation about advisers in theirnetworks in order to compile thelisting of the 2016 FT 400 TopFinancial Advisers.By seeking information in this

manner, the FT was able to obtainverified data on assets undermanagement (AUM) instead ofrelying on self-reporting by advisers.We asked for information onadvisers with more than 10 years’experience and who had more than$300m in assets undermanagement.

The FT then invited qualifyingadvisers — a list which totalled justunder 1,000 — to complete a shortquestionnaire that gave us moreinformation about their practices.We augmented that informationwith our own research on thecandidates, including data fromregulatory filings.The formula the FT uses to grade

advisers is based on six broadfactors and calculates a numericscore for each adviser.The research team chose

indicators that can be taken asproxies for other desirablecharacteristics.

Assets under management cansignal experience managing moneyand client trust.AUM growth rate (we look at bothone-year and two-year growthrates) can be seen as a proxy forperformance, asset retention andability to generate new business.Years of experience can indicate atrack record managing assets indifferent economic and interest-rateenvironments.Compliance record can show howsatisfied clients have been with theadviser’s conduct — a string ofcomplaints could signal problems.Industry certifications (CFA, CFP,

etc) demonstrates technical andindustry knowledge and obtainingthese designations shows aprofessional commitment to gaininginvestment skills.Online accessibility illustratescommitment to providing investorswith easy access and transparentcontact information.AUM accounted for an average of

approximately 66 per cent of eachadviser’s score. Additionally, the FTplaces a cap on the number ofadvisers from any one state that isroughly calculated according to thedistribution of millionaires acrossthe US.

The FT presents the FT 400as an elite group, not as acompetitive ranking.The research team decided that

ranking the industry’s top advisersfrom one to 400 would have beenmisleading since each adviser takesa different approach to his or herpractice and has differentspecialisations. The FTmethodology aims to be bothquantifiable and objective.

The research was conducted onbehalf of the Financial Times byIgnites Distribution Research, aFinancial Times sister publication.

Methodology

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DiValerio, Jr., Anthony J. Morgan Stanley Private Wealth Management W. Conshohocken X

Kron, David J. Kron & Polis Financial Group of Wells Fargo Advisors, LLC Philadelphia X X X X

Levy, Victor S. Levy Wealth Management Group Philadelphia X X X X

Nehrbas, Andrew R. Janney Montgomery Scott LLC Bryn Mawr X X X X

Parker, Sr., John J. Wells Fargo Advisors, LLC Philadelphia X X X

Perry, Joseph A. Aviso Financial, LLC Southampton X X

Rohr, Peter A. Merrill Lynch - Private Banking & Investment Group Philadelphia X

Salmansohn, Eric Morgan Stanley Wealth Management Philadelphia X X X

Seiler, Thomas A. Raymond James Newtown X X X

Strope, Peter M. UBS Financial Services Canonsburg X X X X

SOUTH CAROLINA

Edwards, Jr., Howard D. Wells Fargo Advisors, LLC Charleston X X X X

Ellison, Jr., J. Hagood Merrill Lynch Wealth Management Columbia X X X

Kibler, E. Robertson Merrill Lynch Wealth Management Columbia X X

Sullivan, Derrick A. Morgan Stanley Wealth Management Charleston X X X X

SOUTH DAKOTA

Nelson, Todd Merrill Lynch Wealth Management Sioux Falls X X X X

TENNESSEE

Gooch III, Robert D. Raymond James Memphis X X X

Hassan, Elias (Yaz) Hilliard Lyons Murfreesboro X X X X

Klindt, Eric T. Merrill Lynch - Private Banking & Investment Group Nashville X X X

Liles, Malcolm H. Baird Nashville X X X X

TEXAS

Blonkvist, Kevin M. RBC Wealth Management Midland X X X X

Carlson, Randy R. Merrill Lynch Wealth Management Dallas X X X

Clements, Kevin Morgan Stanley Wealth Management Dallas X X X X

Coff ee, Jr., James L. Merrill Lynch Wealth Management Houston X X X X

Crocker, J. Dow Raymond James Dallas X X X

de Groot, Frederick A. Merrill Lynch Wealth Management The Woodlands X X X

Dodson, Philip M. Merrill Lynch - Private Banking & Investment Group Houston X X

Elias, Mark UBS Private Wealth Management Houston X X X

Emanuelson, Jr., Dwight H. Merrill Lynch - Private Banking & Investment Group Dallas X

Fox, Leslie B. RBC Wealth Management Houston X X X

Fuhrmann III, Carl (Triple) I. Merrill Lynch Wealth Management San Antonio X X X

Hardin, Robert C. Underwood, Neuhaus & Hardin Group of Wells Fargo Advisors, LLC Houston X X X X

Knox, Kerry A. Merrill Lynch Wealth Management Fort Worth X X X X

Kravitz, Ira UBS Financial Services Plano X X

Lewis, Jr., Charles J. Wells Fargo Advisors, LLC Waco X X X X

Lorch, Howard S. The Lorch Group of Wells Fargo Advisors, LLC Houston X X X X

Moore, Marie A. Morgan Stanley Wealth Management Dallas X X X

Murray, R. Nelson Morgan Stanley Private Wealth Management Houston X

Nagel, Steven M. Merrill Lynch Wealth Management Dallas X X

Pearcy, Van M. Van Pearcy's Wealth Services / Raymond James Midland X X X X

Piatas, Richard W. Merrill Lynch Wealth Management Dallas X X

Price, Randy R. RBC Wealth Management Houston X X

Reichek, Mark E. Merrill Lynch Wealth Management Houston X X X X

Robertson, W. Michael Robertson Wealth Management Houston X X X

Schroeder, Ralph J. Ameriprise Financial The Woodlands X X

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Smith, Reed H.B. Merrill Lynch - Private Banking & Investment Group Houston X

Tiras, Scott B. Ameriprise Financial Houston X X

Vicknair, Nestor J. Merrill Lynch Wealth Management Houston X X

Whitehead, Donald L. Morgan Stanley Wealth Management Houston X X

UTAH

Mintz, Glen R. UBS Financial Services Park City X X X X

VERMONT

Stotz, Timothy E. Morgan Stanley Wealth Management Burlington X X X

VIRGINIA

Barnette, Jr., James T. Raymond James Financial Services, Inc. Reston X X X

Campbell, Kelly Campbell Wealth Management Alexandria X

Corey, Lynn Alexis Lee Morgan Stanley Wealth Management Alexandria X X X

Ford, Brian T. RBC Wealth Management Richmond X X X X

Kim, Soo (Susan) Ameriprise Financial Vienna X X X X

Kurtz, Jonathan R. Voya Financial Advisors Vienna X X X X

LeClair, Jeff W. Wells Fargo Advisors, LLC McLean X X X

Leonard, Mark F. Morgan Stanley Wealth Management McLean X X

Lewis, John B. BB&T Scott & Stringfellow Richmond X X X

Mahler, Jr., G. Carl The Pinnacle Group / Raymond James Midlothian X

Rosenthal, Larry Voya Financial Advisors Manassas X X

Speck, David G. Speck-Caudron Investment Group of Wells Fargo Advisors, LLC Alexandria X X X X

Sprowls, Ryan C. Wells Fargo Advisors, LLC Alexandria X X X X

Stoever, Brude D. Stoever & Palmore Investment Group of Wells Fargo Advisors, LLC Richmond X X X

Strange, Allan H. Janney Montgomery Scott LLC Richmond X X X X

WASHINGTON

Braun, Dean Morgan Stanley Private Wealth Management Seattle X X

Cook, Terry L. UBS Private Wealth Management Bellevue X

Elliott, Patrick D. RBC Wealth Management Bainbridge Island X X X X

Hollomon, Stephen J. Merrill Lynch Wealth Management Seattle X X X

Matthews, Michael S. UBS Financial Services Bellevue X X X X

Ragen, Cameron Baird Seattle X X X X

Scannell, Erin J. Ameriprise Financial Mercer Island X X X X

Strong, Robert Baird Seattle X X X X

Tschetter, Richard D.A. Davidson & Co. Bellevue X X X

West, Lowry Morgan Stanley Private Wealth Management Seattle X

WEST VIRGINIA

Houchins, David L. BB&T Scott & Stringfellow Charleston X X X X

WISCONSIN

Burish, Andrew D. UBS Financial Services Madison X X X X

Cimino, Vince Cimino Wealth Advisors Clinton X X

Epstein, David S. Baird Milwaukee X X

Kowal, Jeff rey D. Kowal Investment Group, LLC / Raymond James Waukesha X X X X

Meanwell, Walter E. Wells Fargo Advisors, LLC Madison X X X X

* High net worth (clients with $1m-$10m in investable assets) ** Ultra high net worth (clients with $10m or more in investable assets)


D igital financial adviceplatforms are proliferat-ing, but there is oneproblem — hardly anyfinancial advisers are

usingthem.From Morgan Stanley to Wells

Fargo to LPL Financial, major brokerdealers with thousands of advisersare developing software programs —dubbed “robo-advisers” — whichautomatically build portfolios forinvestors based on a series of ques-tions covering risk tolerance andretirementplans.

For advisers, the software repre-sents a cheap way to handle clientswho do not meet their minimumasset requirements. However, theservice isnotcatchingon.

“I still think our industry is a peo-ple business,” says Steven Jolly, aWells Fargo adviser in Fresno, Cali-fornia. “Who needs you if theyhaven’t built a relationship with you?Why would they reach out to you intheir time of need?” says Mr Jolly,whomanagesabout$200minassets.

It appears many share his scepti-cism. A recent study by Practical Per-spectives, a research and consultingcompany, found that adding a robo-adviser in the next 12 to 24 monthswas a “high priority” for only 7 percent of advisers and more than 50 percentsaid itwasnotapriorityatall.

Currently, just 4 per cent of advis-ers use these online advice platforms,according to the survey of more than850advisers in January.

Advisers, however, are not totallyopposed to robo advice, says HowardSchneider, president of the consul-tancy. They worry it does not fit intotheir business model and may under-cut their personalised approach. Butthey also acknowledge that it repre-sents the future and do not want tomiss out. “There’s sort of this bipolarviewofrobo-advice,”hesays.

Digital platforms could signifi-cantly increase a practice’s efficiencyin handling less wealthy clients, MrSchneider argues. Firms have a sur-plus of these “accommodation cli-ents”, which, for example, could bethe $50,000 account of the great auntof a very wealthy client that the prac-ticewants tokeephappy,hesays.

“In many cases, advisers will dothat,begrudgingly,butthey’lldo it forthe bigger fish that they serve,” MrSchneidersays.

“They’d really like to put thesesmaller accounts on a more efficientplatform like a robo-advice plat-form.”

Significant business growth oppor-tunities exist with digital advice, saysCam Goodwin, a managing partner atHawsGoodwin Financial based nearNashville.His firmwasoneof the firstto employ Schwab’s InstitutionalIntelligent Portfolios digital

platform after it debuted in June. Hesays adoption of the service couldprovide “a growth engine” for hisbusiness, by acting as a vehicle “thatallows us to develop relationshipswith investors earlier in their livesand help set them on a path to buildwealth and eventually get to ourwealthmanagementside”.

Investors who sign up for therobo also get access to a financial

adviser and a certified financialplanner. “It’s a great thing for theindustry, and we’ve decided toembrace itandnot fight it,”hesays.

Mr Goodwin’s practice managesnearly $250m in assets. He would notsay what portion of that was in robo-advice nor would he reveal how manycustomers were on the digital adviceplatform.

The firm has actively pursuedyoung professionals in the greaterNashville area for the digital offering.Mr Goodwin has found these “emerg-ing investors” at networking eventsforaccountantsandlawyers,hesays.

Initially Mr Goodwin thought thetypical client would be a late-20s-to-early-30s millennial, but found theyare mostly in their late 30s with afamily and “rollover dollars” from401(k)retirementplansatprior jobs.

At HawsGoodwin, the minimumaccount size required to work with itswealth management side is generally$500,000, Mr Goodwin says.And many robo clients have made it agoal to cross over to the full-serviceoption at some point in their lives, hesays. “Smaller relationships histori-cally have not gotten [the] attentionor the focus that they need, and sowe’ve always wanted to serve thatmarket,”MrGoodwinsays.

A few recent acquisitions areexpected to lead to an increase in theuse of robo-advisers. Asset managersBlackRock and Invesco have pur-chasedrobosFutureAdvisorandJem-step respectively in about the last sixmonths. Already BlackRock hassigned licensing agreements withBBVA Compass and RBC WealthManagement.

Jeff Goldstein, an adviser in BeverlyHills, is part of RBC Wealth Manage-ment’s pilot programme for Futu-reAdvisor.

He intends to use the robo as anadd-on when providing 401(k) serv-ices to businesses, in handling lesswealthy referrals from top clients andalso managing money for existing cli-ents’ children, forexample.

He says many of the clients hemeets are in the early stages of build-ingwealthandareunlikely tobecomefull-service clients for 20 years. “Thekeyisestablishingthoserelationshipsearly,”hesays.

Mr Goldstein is part of a team thatoversees about $1.5bn in assets,where the firm’s senior partners donot take on accounts of less than $5m.He agrees the robo represents a niceintroduction to financial advice forthose who do not meet the asset mini-mum,but likelywilloneday,hesays.

“It fills a void, it fills a need,” MrGoldstein says. “Quite frankly, thereare many people out there who needfinancial advice that a digital advisercan provide that otherwise simplywouldnotget it.”

Frosty reception for robo-advisersDigital adviceFew advisers are usingthe programs, butsome can see theirfuture potential,writesMatthew Beaton

‘It’s a great thing for theindustry, and we’vedecided to embrace itand not fight it’



Advisers to the wealthy oftenneed to offer far more thanguidance on how to makemoremoney.

For the very rich this caninvolve planning the flow ofriches through generations, aplan to avoid family disputes,avoiding loss of family for-tunes todivorce fromgold-dig-gers, or a strategy to avert thedeleterious effects unearnedinheritance can often have ondescendants.

Over 90 per cent of the FT400 Top Financial Adviserssay they are dealing with cli-ents who have more than$10m in investable assets,where such concerns are morelikelytooccur.

Handling the interests of theultra-rich is not easy but suchclients are highly sought afterby advisers. Acquiring them inthe first place is also not a sim-ple task.

Many advisers succeed insecuring their businessbecause they have already metthem or they are in their socialcircles, says Rajini Kodialam,co-founder and managingdirector at Focus FinancialPartners.

Wealth management for the

super rich is a complex task,concurs Raphael Amit, profes-sor of entrepreneurship andmanagement at the WhartonSchool,wholeadstheWhartonGlobal Family Alliance(WGFA).

Such investors will be look-ing for “a sophisticated andholisticapproach,”hesays.

“ We a l t h m a n a g e -ment . . . requires one to bal-ance multiple goals, includingpreservation of financial capi-tal, but also preservation offamilyheritages,culture,unityandharmony.”

Patrick Dwyer, who headsDwyer & Associates, a practicebased in Miami, concursthat servicing wealthy clientsrequires far more than

knowledge of capital marketsandinvestments.

The work of a financialadviser to the very rich is akinto that of a family counsellor,he argues. “You become a veryimportant trusted adviserinside the family,” he says.“You are intimately involvedwith their family members,thinking about the issues thatare more important than

money.” As a starting point inthis counselling role, he saysadvisers need to build aninventory of the client’s assetsincluding businesses andproperty. Then they shouldask what the client plans toachieve for the rest of his orher life.

Usually there are childrenand grandchildren involved inthe plan, and Mr Dwyer saysclients want to know how theycan pass on their wealth in a way that will not “ruin theirlives”.

Transfers include the use ofa wider range of investmentvehicles than those used byretail investors, such as trustsandpartnerships.

It is during this part of the

service that advisers workwith clients to identify struc-tures that protect assets fromtheir children’s spouses, orthat secure the most appropri-ate tax treatment, Mr Dwyersays.

“We have to be a lot more onour game [when dealing withwealthy clients],” says MaryDeatherage, a wealth adviserwith Morgan Stanley based inLittleFalls,NewJersey.

She says her work includeswealth transfer, estate plan-ning, charitable donations andinsurance. Ms Deatherage fellinto the business thanks to heraccounting background. As acertified public accountant,she says, “the complex stuffdoesn’t scareme”.

Spouses and taxes — the wealthy need advice on it allWealth managers

The very rich havesome peculiar needs,says Mariana Lemann

‘You become avery importanttrusted adviserinside the family’Patrick Dwyer

F or some investors it is nolonger enough to focus onlyon financial returns —many are also seeking waysto put their money where it

might help achieve positive socialchange.

Over 70 per cent of all investorscontacted by Morgan Stanley in a sur-vey published last year said they wereinterested in sustainable investing.That proportion jumped to 84 percentamongmillennials.

And investors are not only gather-ing on the sidelines and looking atinvesting in ethical funds. There isevidence that they are already doingso in largenumbers.

Assets in US-domiciled funds

classified as having an environmen-tal, social and governance (ESG) tiltmore than quadrupled between 2012and 2014, from $1tn to $4.3tn,according to the US SustainableInvestmentForum.

Many investors still worry thatthey might be sacrificing investmentreturns by taking into account ethicalfactors when deciding how to allocatetheirmoney.

However, analysts believe increas-ing numbers of investors are beingswayed by research suggesting thatESG funds are at least providing com-parable financial returns to fundswithoutanethical theme.

“A lot of research remains to beconducted on the broad question of

whether a focus on ESG leads to supe-rior long-term performance,” saysJon Hale, head of sustainableresearch at Morningstar, the fundsdataprovider.

“At the company level, there’sincreasing academic evidence of thatbeing the case,” he adds. “But onceyou put those ideas to work in aninvestment strategy, a host of otherfactors come into play — things likeexecutionandfees.”

Despite the difficulties, the ideathat ethical concerns do not compro-mise returns is gaining traction withsome of the heavyweights of theinvestment industry.

A UBS report published last year,which included a review of over

50 articles that examined perform-ance of sustainable investment,found a slightly larger number ofstudies had results which were infavourofsustainable investment.

“The overall rise in ESG investingrepresents a secular shift inthinking but that becomes a lot morepowerful if studies come outsaying ESG produces comparable orsuperior risk-adjusted returns,” saysChris Mason, a research analyst atCerulli.

The evidence is compelling enoughtohavepersuadedMorningstar torollout an ESG-scoring scheme to accom-pany its existing mutual fund ratingssystem.

It has unveiled its first batch of

sustainability scores for 20,000funds, only some of which are explic-itly marketed as ESG-friendly. Thecompany plans to utilise the new datato help investors learn what to expectfromtheirESGexposures.

“It’s going to be a number of yearsbefore you can connect ESG scoreswith any kind of performance evalua-tion using our numbers,” says MrHale.

In the meantime, there are plentyof ESG funds available to choosefrom, which already enjoy endorse-ments fromMorningstar.

Of the 20,000 funds scored on sus-tainability, roughly one-thirdreceived a “high” or “above average”ESGrating.

Ethical fundssee jump ininvestmentinflows

ESG Investors are beginning to feel reassuredabout returns, saysMichael Shagrin Ethical tilt: there is growing interest in sustainable investments, such as solar farms — Peter Macdiarmid/Getty Images

Markets have an uncanny abil-ity to make fools of even thebrightest prognosticators, and2016 is shaping up to beanother year to frustrate WallStreet’s supposedly finest fore-casters.

The global bond market hasenjoyed a remarkable rallysince Paul Volcker, formerchairman of the US FederalReserve, managed to squashinflation in the 1980s. Bondyields, which move inverselyto prices, have droppedlower and lower since then,and investors have enjoyed

enviably steady returns.Strategists have long pre-

dicted that the end of the greatbond bull market was nigh.They point to events such asthe end of the Federal

Reserve’s “quantitative eas-ing” programme in 2013 andits decision in December toraise short-term interest ratesby a quarter of a point — thefirst upward move in nearly adecade. Indeed, last year theBarclays Global Aggregate, awidely-followed bond index,lost over 3 per cent — its worstperformance in a decade —handing further ammunitionto analysts that saw a reversalin the multi-decade decline inbondyields.

“The bonds of majoradvanced economies remain‘expensive’ relative to levelsconsistent with our econo-mists’ views on growth, infla-tion and the policy stance,”Francesco Garzarelli, co-headof macro and marketsresearch at Goldman Sachswrote inhis2016outlook.

But this year’s market tur-moil has led investors to flockback to the safety of fixedincome, pared back expecta-tions for how aggressively theFedwill raise interest ratesandramped up speculation thatthe European Central Bankand the Bank of Japan will easemonetary policy further. Thishas combined to produce aforecast-bustingbondrally.

The US 10-year Treasuryyield, one of the most widelywatched benchmarks in theworld, has fallen back to wellbelow 2 per cent again, theequivalent German bond yieldis close to zero, and the 10-yearJapanese government bondyield recently made history —and defied centuries of eco-nomic orthodoxy — by fallingintonegativeterritory.

Few saw this coming. At thestart of the year only two of73 analysts polled by Bloomb-erg predicted the 10-year

Treasury yield would fallbelow 2 per cent again, but therally has been broad and inter-national. The average yield ofthe Barclays Global Aggregateindex has fallen back down toabout 1.5 per cent — within awhisker of a new record low.No wonder that as George Eliotnoted inMiddlemarch: “Amongall forms of mistake, prophecyis themostgratuitous.”

Despite seeing their fore-casts unravel this year, mostanalysts are still predictingthat bond yields will climb inthe coming months and years.According to recent surveysconducted by Bloomberg,strategists forecast that the 10-year US, German, UK and Jap-anese bond yields will rise to 2.55 per cent, 0.89 per cent,2.38 per cent and 0.13 per cent

respectively by this time nextyear. Some big-name investorsare even punchier. MichaelHasenstab, the high-profilechief investment officer ofTempleton Global Macro,argues that the pervasive pes-simism that has envelopedmarkets this year is overdoneand warns that the return ofinflation is still the biggestdanger.

“The weight of . . . evidencesuggests that it would take aset of heroic assumptions tobelieve that inflation willremain at the currentextremely low levels,” Mr

Hasenstab wrote in a report tohis clients in February. “Webelieve financial markets areunderestimating the potentialforarise inUSyields.”

However, some other well-known analysts and moneymanagers continue to cautionthat repeated warnings thatthe bond bull market will soonend will once more come tonaught.

Several major central banksare now not just dabbling withbuying bonds but even nega-tive benchmark interest rates,which makes the positive-yielding government debteven more attractive, and yetmore stimulus could be on thecards from the Bank of Japanand the European CentralBank.

The Swedish Riksbank wasfirst to experiment with nega-tive interest rates in 2009.With the Bank of Japan joiningthe club earlier this year,almost a quarter of the globaleconomy now has negativeinterest rates. That has pushedthe value of negative-yieldinggovernment bonds to over$5tn this year, and trans-formed the outlook for the restof theyear.

Steven Major, global head offixed income research atHSBC, was one of the few strat-egists who accurately pre-dicted last year that bondyields were not about to shootup.

He has forecast that the US,German and Japanese 10-yearyields will end the year at 1.5per cent, 0.2 per cent and 0.3per cent. Even that may be toosanguine, the strategistrecentlywarned.

While there are mountingdoubtsovertheefficacyofneg-ative interest rates—primarilydue to the challenges they poseto the global banking system —Mr Major argued in a recentreport that investors areunderestimating the willing-ness and ability of centralbanks to move their bench-mark rates even further belowzero. This could push bondyieldsevenlower.

“Markets do not seem tobelievethatratescanfallmuchfurther. Forward rates implyonly small shifts lower in thoseheadline rates already in nega-tive territory. But the marketsmay be wrong,” he wrote. “Weare not changing our bondyield forecasts but our analysissuggests there is growing riskratescouldstill go lower.”

Bond yields confound forecastersFixed incomeThe bull runmight not quitebe over yet,writesRobinWigglesworth

Bond bulls: market turmoilhas led to a forecast-bustingrallyGetty Images

‘Markets do notseem to believe thatrates can fall muchfurther . . . but theymay be wrong’



KerryKnoxalwayshadhiseyeonthebigprize.Butafteradecade inminorleaguebaseball tryingtomakeit intothemajor league, thepitcherrealisedthesportwasnotgoingtobehis tickettosuccess.

So,afteracareer that includedreachingtheAAAleague, thehighestminor league level intheUS,MrKnoxgaveupbaseball in1999andjoinedMerrillLynch’sso-called“thunderingherd”ofadvisers.

It tookquitea longtime,but in2015heachievedthesortofsuccessofwhichhehadalwaysdreamt.

Thevalueofclientassetsunderhismanagementrosebyover350percent from$361mto$1.7bnintheyeartoSeptember30.TheMerrillLynchWealthManagementadviser’shaulfor theyearmakeshimthefastestgrowingadviserbyassetsonthisyear’sFT400list.

Thisgrowthhasnotcomefromhislistof formerteammatesandsportscontacts,which iswhatmanybrokerageswhohirehiskindofprofessionalathletehave inmind. Infact,MrKnoxhas fewerthan10professionalathleteclients,whoaremostlyretiredmajorandminorleagueplayers.

Buthedoesattributehissuccess tothesportingdisciplineof“stickingtothegameplan”.Thehardworkhasnotonlypaidoff intermsofassetgrowth—hehasalsorisentotherankofvice-presidentatMerrillandisoneof thecompany’ssenior financialadvisers.

Luckdidplayapart,heconcedes.Severalclients involvedinprivateequitysuddenlygavehimlargesumsto investandtheassets fromanotherclient,whohadsoldabusiness,helpedtoo.But thesewerenotisolatedevents.ManyofMrKnox’sclients increasedtheamountsofassetshehasbeentrustedtomanage.

MrKnoxworksalongsidethreeotheradvisersandtwosupportstaffinFortWorth,Texas, thatmanageacombined$2.8bnundertheMiller,Knox,Dennis,Martinname.

“Wesawaspecific increase inportfoliosbecauseanumberofclientsarestartingtogiveallof their

assets,”MrKnoxsays.Thiswasachievedpartlybyencouragingclients tosetmorespecificinvestmentobjectives,headds—a“goals-basedinvesting”strategythatMerrillandotherbrokerageshavepushedfor inrecentyears.

“Wesitdownwitheveryclientandputafinancialplantogether forthem,givingthemaninvestmentpersonalityquestionnaire,andbasedonthatwe’reable toclearlydefineclients’goalsandinvestaccordingly,”hesays.

Forgingtightclient linkshasalsohelpedbring inmoreassetsandboostreferrals, saysMrKnox.“Wereallydig intotherelationshipandget toknowourclients.We’vehelpedclients throughdivorces,deaths—allmajor lifeevents,”hesays.“Wedoalotmore listeningthantalkingandbecomefriendswithourclients.”

Mostnewprospectsaregeneratedbyreferrals fromexistingclientsorlocalprofessionalssuchasaccountantsorattorneys.“We’renotpushy,we’reunassuming,”hesays.“Idon’tevencarrybusinesscards.”

Thissoft sales tactic is reflected inhiscommunityties, too.Hecoacheslittle leaguebaseballandsaysalumnilinks fromwherehestudiedatTexasChristianUniversityhavealsohelpedbuildhis team’sbookofbusiness,90percentofwhichcomesfromtheFortWortharea.

MrKnoxspecialises inseparatelymanagedaccounts,but theteamconferontopics includingmarketoutlookandallocationsstrategies.

“Lastyear,ourgoalandfocusbecametogrowassetsandinsteadofjustoneortwoofus focusingonthat,all fourofus focusedonit,”hesays.“You’redoingoneof twothings,growingorshrinking,andwe’realwaystryingtogrow.”

Baseballveteran istop of theleagueProfile

Former sports pro isthe FT400’s fastestgrowing adviser by assetsfor the year, writesRichard Henderson

Susan Caplan: mentoring plays akey role in producing successfulwomen advisers

Women remain in a minorityamong the elite FinancialTimes 400 Top FinancialAdvisers. The list has beencompiled annually since 2013,but women have never made upmorethan10percentof theselection. This year is no dif-ferent — among the groupthereare just34women.

It is difficult for anyone —man or woman — to achieve aspot at the top against tens ofthousandsof financialadvisersintheUS.

However, the gender skew isalso a manifestation of abroader statistical disadvan-tage. Men far outnumberwomen in the financial advi-soryspace ingeneral.

US Bureau of Labor Statis-tics show that 38 per cent ofpersonal financial advisers inMarch 2015 were women, upfrom 36 per cent in 2014.While the data indicate thatthe industry is at least movingtowards gender parity — the

bureau’s data showed thatwomen made up just 26 percent of the industry in 2013 —women financial advisers saythose statistics show how farthe industry has to go before itreflects the broader make-upofsociety.

“If we were well representedwith women and men and dif-ferent ethnicities, then wewould be better positioned inthe industry to better serve theneeds of the clients,” says Mar-garet Jackson, a financialadviser based in Annapolis,Maryland, and senior vice-president at RBC Wealth Man-agement, who is among this

year’sFT400topadvisers.As some female advisers

point out, having more womenin the industry could helpattract more assets. They saythis isbecausesomefemalecli-ents say they prefer workingwith women financial advis-ers.

Thefemaleadvisersaddthatqualities often associated withwomen — being approachable,good listeners, attentive todetail — help them win busi-ness among both male andfemaleprospects.

The 34 women who made itto the FT 400 list this year hadan average of $1bn in assets

under management (AUM) asof end-September 2015, up 42per cent from the average of$703m managed by thewomen who made it on to lastyear’s list.

In contrast, the averageAUM of the male advisers fell11 per cent to $1.6bn from$1.8bnlastyear.

This year’s women FT 400advisers have worked in theindustry for between 16 and 38years, clocking up an averageof 27 years of experience. Over70 per cent are at least 50 yearsold. Most work in teams, onlyabout a quarter of them aresolopractitioners.

Mentoring and access towomen’s organisations arebelieved to be crucial in sup-porting the growth of thenumber of women financialadvisers in the industry andtheirclientassets.

Ms Jackson, who has been afinancial adviser for 16 years,has been active in RBC WealthManagement’s Women’s Asso-ciation of Financial Advisors(WAFA), where she was aboard member for five yearsand served as president from2011 to 2013. WAFA, whichwas formed 25 years ago, aimsto recruit, retain, and enhancethe productivity of women

Women remain in tiny minority at the topGender parity

More female adviserscould help attractmore business, writesRita Raagas De Ramos

financial advisers and branchdirectors.

The industryneedsmorewomen-focused organisa-tions, says Susan Kaplan,

president of KaplanFinancial Services inNewton, Massa-chusetts. But MsKaplan says shewould also encour-age women toensure that theybelong to otherorganisationstoo.

Both Ms Jacksonand Ms Kaplan

believe that mentoringplays a key role in pro-ducing successfulwomenadvisers.

“Mentoring is veryimportant, and it

need not be a full-time

commitment. I’ve had womencall me in the field for just‘quick-hit’ kinds of questions.And,althoughIdon’thavea lotof extra time, for them I haveall the time in the world,” saysMs Kaplan, who has been inthe industry for 20 years.“ H a v i n g r o l e m o d -els . . . empowers women tofeel that theycandoit too.”

MsKaplanbelievesefforts tobring more women into thefinancial advisory field shouldeven start in school. “Ithink the problem, sadly,begins at a very early age.Culture in this country con-vinces girls and women thatthey’re not good at, or have noskills in, math and finance.Sadly, it’s why you have fewerwomen going into the field,”shesays.

Kerry Knox: minor league pitcher

‘We’re not pushy, we’reunassuming. I don’t evencarry business cards.’Kerry Knox

W ealthy investors areparticularly inter-ested in so-calledalternative invest-ment asset classes

becausetheyarehopingtheycanplaydistinct roles in diversifying a portfo-lio.

But there are no short-cuts when itcomes to selecting investments inassets such as hedge funds, privateequity, real estate, commodities andalternative mutual funds, says Alex-ander Williams, an adviser at UBSPrivate Wealth Management in NewYork,whoseteamruns$2.7bn.

“We’re spending more and moretime figuring out the right mix ofalternative managers that are trulydoingsomethingdifferent,”hesays.

One of the first steps is determiningwhether alternative investments areappropriate foraclient.

Very wealthy clients — typicallywith at least $5m-$10m to invest —are the most likely candidates for pri-vate funds.

These clients often do not need to

generate income, and are insteadaiming to grow assets over the longterm. This means they can take onilliquid strategies that lock up capitalfor months or years at a time, saysAimee Cogan, an adviser at MorganStanley Wealth Management in Sara-sota, Florida, whose team runs$685minclientassets.

“The ultra high-net-worth clienthas the ability to take on illiquidityand a longer investment timeframe,”shesays.

Clients’ preference for this invest-ing approach can vary according totheir lifestyle, family circumstancesandcharitablegoals.Theseareall fac-tors in determining cash needs andwhether clients can commit to invest-ing in illiquid holdings, Mr Williamssays.

For lesswealthyclientswithportfo-lio sizes closer to $1m, advisers relyless on illiquid vehicles, says SusanKim, an adviser at Ameriprise Finan-cial Services in Vienna, Virginia. Herteam, which oversees $1.1bn for 850households, does not recommend

alternatives to most investors untiltheyapproach$1m.

“It isn’t for everyone,” she says. Foreach individual, tax and liquidityconsiderations differ based on age,risk appetite, and investment timehorizon,sheadds.

Advisers are more likely to con-sider alternatives if they are active inbuilding investment portfolios ratherthan broad financial planning, saysErlend Bø, head of distribution for

Angel Oak Capital Advisors, an Atlan-ta-based manager with traditionaland alternative funds that runs $6bn.Those involved in broad financialplanning are more likely to rely onmodels provided by the companiesforwhomtheywork.

“But [portfolio manager] adviserspride themselves on knowing what’sgoing on in the markets,” Mr Bø says.“They’re very interested in ‘nichey’alternativestrategies.”

One sizedoes not fitall in hunt foralternativesAsset classesNon-traditional investments cansuit wealthy investors, writesTom Stabile

Once advisers opt for alternatives,they must set the scale of allocation.Morgan Stanley recommends settingalternatives at 20 per cent of a verywealthy client’s portfolio. But MsCogan says in today’s market, herteam aims for 25-30 per cent. “Welikealternatives inmorevolatilemar-kets, and post-[quantitative easing],volatility isback,”sheadds.

Mr Williams says his team aimsto invest 20 per cent of a client’s port-

folio in alternatives, while Ms Kimsays her practice targets a 10-15 percent allocation at most. A big reasonis that alternative fund fees can behigher for the $1m client, which putsadamperonnetreturns, shesays.

The advisers then decide on typesof products. For Mr Williams, themenu includes hedge funds, privateequity and alternative mutual funds,otherwise known as “liquid alts”,which have “slightly less in returns

expectations . . . but similar expo-sures”,hesays.

The main elements for Ms Cogan’steam are heavier tilts to hedge fundsand private equity, and lesseramounts allocated to managedfutures — also known as commoditytrading advisers or CTAs, which gen-erally take long or short positions infutures markets — and to preciousmetals. “Managed futures and pre-cious metals are . . . more tactical,”shesays.

Alternative mutual funds and realestate investment trusts (Reits) arestaples for Ms Kim’s team, which alsohas a preference for open-endedfunds, shesays.

Ms Cogan’s team currently favoursmanaged futures — which “have beenone of our better performers andhave helped smooth the ride” — aswell as private equity investing in dis-tressed companies and direct lendingfunds.

Private credit — which typicallyinvolves investing in funds that origi-nate or buy corporate loans — is also atheme for Mr Williams, as well as sec-tor-specific opportunities, such as afund focused on the aviation indus-try, he says. “Funds like thatcan . . . fill in pieces of the puzzle,” hesays.

His team is also looking at masterlimited partnerships in the hard-hitenergy sector that pay investorsthroughregularagreeddistributions.

Long-short, managed futures, andalternative exchange traded fundsare primary tools for Ms Kim’s team,along with non-traded Reits. “We like[managers] that can go into individ-ual sectors or stocks, and that canshort,”shesays.

Developing alternative investingexpertise has brought new businessto Ms Cogan’s team, both from pro-spective clients as well as other advis-ersseekingassistance, shesays.

“The biggest factor is client educa-tion,” Ms Cogan says. “The fund man-agers we work with have been very accommodating.”

Precious metals: advisers mustdecide on allocationsBloomberg

‘The biggest factor isclient education’Aimee Cogan

16 | FTReports FINANCIAL TIMES Thursday 31 March 2016

FTSPECIALREPORT FT400 · 2017. 10. 24. · Reporter,FundFire MarianaLemann Seniorreporter,FundFire...

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