Despite the talk of small financial firms folding or being absorbed by huge conglomerates, many small firms are thriving and growing.
Some of the fastest-growing firms in the nation have less than $200 million in client assets, according to an analysis conducted by Financial Advisor magazine.
The analysis of more than 600 firms shows the top one by percentage of growth in assets is Fiduciary Wealth Management LLC in Alexandria, Va., a suburb of Washington D.C.
Fiduciary Wealth Management has $113 million in client assets under management, and grew by 175 percent in 2016, all of it accomplished organically.
“We focus on an underserved market -- small and mid-sized retirement plans,” says Christopher J. Broderick, president of the firm. This past year the firm added a third advisor to its roster, more than doubled its client base, and increased its assets per client by nearly 30 percent. “Things really came together this past year for us. No one undercuts our price and our delivery of service.”
Broderick sees more growth opportunity for the firm in the future because, “There is still a great deal of opportunity in this underserved market.”
Other small RIAs use different tactics to grow.
Gabriel Shahin, principal at Falcon Wealth Planning in Ontario, Calif., attributes the firm’s rapid growth in assets under management to its aggressive outreach for referrals. Falcon doubled its AUM in 2016 to $69 million by gathering more clients, mostly in the aeronautical and engineering fields, and by quadrupling its average assets per client.
“We opened our doors in March 2015 with eight clients and $5 million in AUM. I started teaching finances at a university. As I promoted the classes, our firm gained clients. Then I started doing a radio show,” Shahin says.
Growth can also be accomplished by serving a niche market, which is what Inspire Investing in Hollister, Calif., has done. The small firm, with $55 million in AUM, grew its assets by 131 percent in 2016 to come in third in the analysis. The firm has a goal of reaching $1 billion in AUM in 3 years, says Robert Netzly, CEO. The firm donates half of its profits to charity and hopes to donate $1 billion in the next 10 years.