If you need help deciding what to do with your money in a volatile stock market and uncertain economy, the choices can be confusing.
Financial Advisor. Investment Advisor. Broker. Financial planner. Certified Financial Planner.
An inaugural list of the best financial advisory firms of 2023, compiled for USA TODAY by market research firm Statista, attempts to simplify the clutter.
The list is based on the belief, shared by many financial experts, that the best place to start is with Registered Investment Advisers (RIAs). These are companies that have a fiduciary duty to act in the best interests of their customers at all times. They charge fees rather than sales commissions and employ Investment Counseling Representatives (RIAs) who are licensed to give financial advice.
“You have a special relationship of trust,” says Karen Barr, CEO of the Investment Adviser Association (IAA), a trade group for RIAs. “You have an obligation to put the interests of your clients first.”
Other types of financial firms, such as brokers, take commissions on the sale of products – such as stocks, bonds or mutual funds – and only have to provide advice tailored to their clients. This means that the investments they recommend don’t have to be inappropriate, but they don’t have to meet the client’s objectives. A broker-dealer may, for example, recommend investment products that could potentially be more expensive than competing products, allowing the person to earn a commission.
There were more than 32,000 RIA companies in the United States at the end of 2021, including about 14,800 that were registered with the Securities and Exchange Commission and managed more than 99% of total RIA assets of $128.4 trillion. , according to the latest figures from the IAA. The remaining 17,300 companies each manage less than $100 million in assets and are registered with state agencies.
Statista’s list for USA TODAY selected this daunting universe of AIR in the top 500 companies based on their growth in short- and long-term assets under management and recommendations from clients and peers.
For example, McGlone Suttner Wealth Management of Appleton, Wisconsin, has nearly quadrupled the assets it manages over the past year. Atlanta-based Haven Global Partners has more than doubled its assets under management every year since 2018. And Lake Street Financial has seen both solid asset growth and a high number of referrals.
It’s still a long list, but you can narrow your options further by finding a company based in your city or state if it’s important to meet with your advisor in person. You can also choose a smaller company with fewer assets under management or a larger one with more assets.
Smaller businesses have fewer employees but often have fewer clients per adviser and can therefore provide more personalized service, says Stephen Fletcher, lead planner for Richmond-based small business EVOadvisers.
Barr says that’s not necessarily the case and it depends on the representative.
Other big questions to ask yourself are: what kind of service do you want? And what kind of fees do you want to pay?
Some RIAs may simply provide investment advice. Others lay out a more comprehensive plan for your finances that might include when and how you will retire (do you want to work part-time?), estate planning, debt repayment, insurance, and taxes. Many companies take on both roles with the same or multiple advisor representatives.
Then there is the issue of fees.
RIAs typically charge annual fees based on a percentage of the assets they manage, usually around 1%. So, if you have a portfolio of $100,000, you will pay $1,000 per year. In this case, an advisor monitors your money throughout the year, buying and selling securities based on your overall goals.
Advisors may also charge a fixed annual fee regardless of how much you invest; a package based on the one-time preparation of a large-scale financial plan; or an hourly rate, says Ronald Rhoades, director of the personal financial planning program at Western Kentucky University’s Gordon Ford College of Business.
“You want to ask, ‘Do I need someone to manage my money for me or do I want to do it myself?'” Barr says. “Are you comfortable paying asset-based fees?”
Many RIAs specialize in one or more services, such as investment advice, retirement planning, budgeting, or tax planning. Others largely work with individuals in certain professions — like doctors, dentists or, yes, bass fisherman — or life situations, like divorcees, Fletcher says.
You can get information about a company’s specialties and background on its website as well as on the company’s Form ADV, which it files with the SEC.
You can also check a firm’s registration with the SEC’s Investment Advisers Public Disclosure Tool and check backgrounds and any disciplinary actions against investment firms and individual advisers on the site. Financial Industry Regulatory Authority (FINRA) Web BrokerCheck.
Editor’s Note: Cherrydale Wealth Management has been removed from the following list as it is no longer accepting new clients. Quadrant Private Wealth Management took its place.