Why use a wealth advisor just to invest money?

Everyday wealth advisors seek to add value to the families they serve—in turn, cultivating ever-deeper relationships. And as families bring their advisors deeper into the complexity of their lives, leading advisors respond with teams of specialists to provide personalized service.

The service offerings are long, including: wealth transfer strategies, liability management, charitable giving, concierge services, geriatric services, top reporting, family governance, career planning, family meeting coordination, family education. And, oh yeah, investment strategy and implementation.

Where does one start looking for the right team?

SHOOK is here to help. As the only consulting research firm in the world with a specialty in quality, SHOOK conducts deep due diligence as the basis for its rankings.

Disclosure: SHOOK is completely independent and objective and receives no compensation for placement in its rankings.

What qualities does SHOOK look for?

For starters, existing advisor and team rankings focus only on numbers — total assets under management, revenue, headcount, etc. But what does it do to know that one team makes more money than another?

Teams have become highly specialized and focus more on certain types of customers to provide the most personalized service. This requires a careful examination of the entire team, from its purpose (not just its mission) to its culture and skill set. In other words, the effort involved in analyzing a team becomes exponential compared to evaluating a single advisor. So we improved our methodology and broadened our process, such as expanding the number of people per team we interviewed (this happens over the phone, virtually and in person).

When we meet with these teams, which are starting to look more like stand-alone boutiques, we look closely at management and senior executives, as they tend to dictate the experience of each customer from top to bottom. Every time we meet with a team or individual advisor for a due diligence meeting, we always think, “Would we recommend this team (or individual) to a friend or family member?” Quality always comes first: If we’re going to include a team (or advisor) in our rankings, we need to make sure everyone is top quality.

High Net Worth and Private Wealth Teams

Because different levels of wealth tend to require different types of services, wealth management broadly classifies between high net worth and private wealth. For the purposes of our ranking, high-net-worth teams primarily focus on households with accounts under $10 million—at least to start; however, these teams are entirely competent to work with much more affluent clients, and most do. Private wealth teams generally focus on households with accounts of $10 million and above, even though their account minimums may be much lower and that there is typically no minimum for related household accounts, such as children.

The ranking algorithm

The Forbes ranking of the best wealth management teams in America, compiled by SHOOK Researchis based on an algorithm of qualitative criteria, mostly obtained through telephone, virtual and in-person due diligence interviews and quantitative data. This qualitative benchmark focuses on studying each team’s best practices – service models, investment process, team building, skill sets, etc. The algorithm also weighs factors such as revenue trends, assets under management, compliance records. Portfolio performance is not a criterion due to different client objectives and lack of audited data. ANY Forbes nor do SHOOK receive a fee in exchange for rankings.

(For the full list and more, visit Top Net Worth Teams and Top private wealth teams; advisors can complete a survey for future rankings at www.SHOOKresearch.com.)

Research Summary (as of November 2024)

We don’t want 300,000 nominations, so we set high thresholds to minimize the amount we get:

• 6,892 councilor nominations received
• 11,098 team nominations received
• 21,943 telephone interviews in total
• 5,306 total in-person interviews at counselor locations
• 1,545 virtual interviews in total

The SHOOK process

SHOOK is seeking nominations in the financial services industry. SHOOK accepts advisors who meet predetermined minimum thresholds and acceptable compliance records. To date, SHOOK has received nearly 46,892 nominations—advisors who meet SHOOK’s thresholds.

Unlike other advisor rankings, SHOOK is not a “robo-ranker” – numbers like production and assets don’t tell the whole story, especially when much of the data is self-reported. SHOOK Research creates rankings of role models – teams that are at the forefront of delivering best practices and delivering a high-quality customer experience. It is imperative to focus on both quantitative and qualitative factors, including telephone and in-person meetings.

SHOOK Research is the only ranking firm that interviews teams and advisors by phone and in person at the firm’s location.

Basic requirements

· Minimum of 7 years as an advisor to at least 1 team member

· Fully operational as a team for at least 1 year

· Completion of the online survey

· Valuations are focused on wealth management

· Acceptable compliance record

Quantitative metrics

· Revenue/production; assigned weights for each

· Assets under management – and the quality of those assets – both in custody and a close look at assets held

· Customer data such as retention rates

· Portfolio performance is not a factor; audited returns among advisors are rare, and different client goals provide different returns

Qualitative metrics

· Telephone, virtual and face-to-face meetings with the teams (if a face-to-face meeting is not possible, exceptions are considered where the interview will take place after a ranking has been published).

· Compliance records. Some “conditions” can be overlooked (eg, firm or product failure beyond the scope of an advisor’s due diligence; the older it is, the less we look at it). Because there are many gray areas, the SHOOK team is willing to listen to a firm that is willing to stand behind the advisor with written support.

· Teams that provide a complete customer experience: service model; the investment process; fee structure; breadth of services (e.g. liabilities and other wealth management services)

· Credentials (years of service can serve as a proxy)

· Use of team and team dynamics

· Community involvement

· Discussions with management, colleagues, fellow competitors

U4/Compliance Issues

The following conditions will be taken into account to reduce the weightage for offences:

· Offenses that are dismissed or closed without any action

· The complaint arose from a product, service or advice initiated by a previous advisor or another or former team member

· Time period since complaint

· Claims related to product failure not related to investment advice (certain limited partnerships, adjusted rate securities, etc.)

· Claims that have been settled (must be proven) to satisfy a client who has remained with the adviser for at least one year from the date of settlement

· Complaints that are proven to be without merit

· Actions taken as a result of an administrative error or failure of the firm

Once an adviser’s compliance rating falls into a sustainable category, the following conditions must be met:

· Advisor evaluation must be among SHOOK’s highest quality measures, including the in-person interview

· Letters of recommendation

The ranking algorithm

The algorithm is designed to accurately compare the business practices of a large group of teams based on quantitative and qualitative elements. The data is weighted to ensure that dynamics such as preferred “best practices”, business models, recent business activity, etc. are prioritized. Each variable is evaluated and represents a specific value for each measured component. This data is fed into an algorithm that measures thousands of teams against each other.

SHOOK Disclosures

Data provided by SHOW^® Research, LLC. Data from 31.03.24

Source: Forbes.com (November 2024). The Forbes America Top Wealth Management Teams ranking was developed by SHOOK Research and is based on in-person, virtual and telephone due diligence meetings and a ranking algorithm that includes: a measure of each team’s best practices, client retention, industry experience, conformity assessment. registrations, nominations of companies; and quantitative criteria including: assets under management and revenue generated for their firms. Investment performance is not a criterion because client objectives and risk tolerances vary and advisors rarely have audited performance reports. SHOOK’s research and rankings provide opinions intended to help investors select the right financial advisor and team and are not indicative of future performance or representative of a client’s experience. Past performance is not an indication of future results. Neither Forbes nor SHOOK Research receive compensation for placement in the rankings. For more information, see www.SHOOKresearch.com. SHOOK is a registered trademark of SHOOK Research, LLC.

For more information, see www.SHOOKresearch.com.