Waverly Advisors Rankings Disclosure

Neither rankings and/or recognitions by unaffiliated rating services, publications, media, or other organizations, nor the achievement of any professional designation, certification, degree, job promotion, license, membership in any professional organization, or any amount of prior experience or success should be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if Waverly Advisors is engaged, or continues to be engaged, to provide investment advisory services. Rankings published by magazines, and others, generally base their selections exclusively on information prepared and/or submitted by the recognized adviser. Rankings are generally limited to participating advisers (see participation criteria/methodology below). Unless expressly indicated to the contrary, Waverly Advisors did not pay a fee to be included on any such ranking. No ranking or recognition should be construed as a current or past endorsement of Waverly Advisors by any of its clients. Waverly Advisor’s Chief Compliance Officer remains available to address any questions regarding rankings and/or recognitions, including providing the criteria used for any reflected ranking.

 

METHODOLOGY

What Qualities Does SHOOK Look For?

To start, every ranking of independent advisors we’ve seen focus on size—total assets under management, headcount, etc. But that’s like recommending a major bank—how does recommending an entire firm help anyone looking for a single trusted advisor?

For bigger firms, SHOOK focuses on individuals or teams. But for individuals looking for an independent advisor, SHOOK’s focus on quality skews its recommendations towards firms in which we can thoroughly understand how each client is actually treated. In doing so, we measure aspects like processes that are inherent in each client relationship, what is the team’s purpose, and what is the underlying culture that we see throughout all levels of employees.

When we meet with these independent firms, we take a close look at leadership and the senior principals since they tend to dictate every client’s experience. When we meet with a firm or an advisor for a due diligence meeting, we are always thinking to ourselves, “Would we recommend this firm (or individual) to a friend or family member?” Quality is always first; if we’re going to include a firm (or advisor) on our rankings, we have to make sure everyone is of the highest quality.

The Forbes ranking of America’s Top RIA Firms, developed by SHOOK Research, is based on an algorithm of qualitative criteria, mostly gained through telephone, virtual and in-person due diligence interviews, and quantitative data. The algorithm weighs factors like revenue trends, assets under management, compliance records, industry experience and those that encompass best practices and approach to working with clients. Portfolio performance is not a criterion due to varying client objectives and lack of audited data. Neither Forbes nor SHOOK receive a fee in exchange for rankings.

(For the full list and more, visit www.forbes.com/lists/top-ria-firms; advisors can complete a survey for upcoming rankings at www.SHOOKresearch.com.)

Research Summary (as of October 2023)

We don’t want 300,000 nominations so we set thresholds to minimize the quantity we receive:

 

  • 42,643 nominations received, based on thresholds
  • 23,100 invited to complete online survey
  • 18,417 telephone interviews
  • 4,281 in-person interviews at advisors’ location
  • 1,487 virtual interviews

*Approximately 20% represent independent advisors.

The SHOOK Process

SHOOK scours the financial services industry for nominations. SHOOK accepts advisors who meet pre-determined minimum thresholds and acceptable compliance records. As of this date, SHOOK has received nearly 42,643 nominations—advisors who meet SHOOK’s thresholds. 23,100 of these nominees have taken an online survey.

Unlike other advisor rankings, SHOOK is not a “robo-ranker”—numbers such as 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—firms that are leading the way in offering best practices and providing a high-quality experience for clients. A focus on both quantitative and qualitative factors, including telephone and in-person meetings, is imperative.

SHOOK Research is the only ranking firm that interviews firms and advisors via telephone and in person at the firm’s location.

 

Basic Requirements

 

  • A minimum of 7 years as an advisor for 1 partner/principal
  • Fully operational as a practice for a minimum of 1 year
  • Must incorporate a fiduciary model
  • Completion of online survey and interview with SHOOK
  • Evaluations focused on wealth management
  • Acceptable compliance record

 

Quantitative Metrics

 

  • Revenues
  • Assets under management—and quality of those assets
  • Client-related data, such as retention rates
  • Portfolio performance is not a factor; audited returns among advisors are rare, and differing client objectives provide varying returns

 

Qualitative Metrics

 

  • Telephone, virtual and in-person meetings with firms (if an in-person meeting cannot be accomplished, exceptions are considered in which the interview will occur after a ranking has been published).
  • Compliance records. Some “dings” can be overlooked (e.g., firm or product failure beyond the scope of an advisor’s due diligence; the older a ding, the less we look). Since 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.
  • Firms that provide a full client experience: Service model; investing process; fee structure; breadth of services (e.g., liabilities and other wealth management services)
  • Credentials (years of service can serve as proxy)
  • Use of team and team dynamics
  • Community involvement
  • Discussions with management, peers, competing peers

 

Compliance Issues

The following conditions will be considered in order to lessen weightings infractions:

 

  • Infractions that are denied or closed with no action
  • Complaint arose from a product, service or advice initiated by a previous advisor or another member or former member of team
  • Length of time since complaint
  • Complaints related to product failure not related to investment advice (some limited partnerships, adjusted-rate securities, etc.)
  • Complaints that have been settled (must be proven) to appease a client who remained with the advisor for at least one year following settlement date
  • Complaints that are proven to be meritless
  • Actions taken as a result of administrative error or failure by firm

 

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

 

  • An advisor’s rating must be among SHOOK’s highest qualitative measures including in-person interview
  • Letters of recommendation

 

Ranking Algorithm

The algorithm is designed to fairly compare the business practices of a large group of firms based on quantitative and qualitative elements. Data are weighted to ensure priorities are given to dynamics such as preferred “best practices,” business models, recent business activity, etc. Each variable is graded and represents a certain value for each measured component. These data are fed into an algorithm that measures thousands of firms against each other.

SHOOK Disclosures

SHOOK is completely independent and objective and does not receive compensation from the advisors, Firms, the media, or any other source in exchange for placement on a ranking. SHOOK is funded through various sources, such as conferences and research partners. Since every investor has unique needs, investors must carefully choose the right advisor for their own situation and perform their own due diligence. SHOOK’s research and rankings provide opinions for how to choose the right financial advisor and not indicative of future performance or representative of any one client’s experience. Portfolio performance is not a criterion due to varying client objectives and lack of audited data. Remember, past performance is not an indication of future results.

Barron’s publishes four individual advisor rankings each year (Top 100 Advisors, Top 100 Women Advisors, Top 100 Independent Advisors, Top 1,200 Advisors) along with three team- or firm-based rankings (Top RIA Firms, Top Institutional Consultants, Top Wealth Management Firms).

The goal is to shine a spotlight on the nation’s best financial advisors, with an eye toward raising standards in the industry. The rankings serve two distinct types of Barron’s readers. For wealth management professionals, they serve as an industry scorecard. For investors, the rankings are a tool that can help in the process of finding financial guidance.

Advisors who wish to be ranked fill out a 102-question survey about their practice. We verify that data with the advisors’ firms and with regulatory databases and then we apply our rankings formula to the data to generate a ranking. The formula features three major categories of calculations: (1) Assets (2) Revenue (3) Quality of practice. In each of those categories we do multiple subcalculations.

For instance, we take into account not just the amount of assets an advisor manages, but also the type of assets—are they private-wealth assets or institutional? If they’re institutional, are they for a foundation or an endowment, or are they corporate assets? We measure the growth of advisors’ practices and their client retention. We also consider a wide range of qualitative factors, including the advisors’ experience, their advanced degrees and industry designations, the size, shape, and diversity of their teams, their charitable and philanthropic work and, of course, their compliance records.

The rankings are meant as a starting point for clients looking for an advisor—a first-pass vetting that can help investors narrow a search. Every advisor will have his or her own approach to investing, financial planning, and other services. Clients are encouraged to approach a search for an advisor the way they would a search for a doctor—interviewing multiple professionals and getting opinions from multiple third parties.

 

A link to the Barron’s Methodology can be found HERE, however, this link is subscription based; for this reason we have added the content of the Barron’s Methodology to the body of this post.

Citywire uses historical Form ADV data compiled for them by Discovery Data, then they run it through a layer of screens. They screen out RIAs that don’t include financial planning as one of their core services, as well as firms that are offshoots of broker-dealers and banks (firms whose advisors may be dually registered with a broker-dealer but maintain their own RIA entity are in bounds). Lastly, they screen out firms that primarily function as back-end service providers for advisory teams.

Once they’ve done all that, they look at the eligible firms’ performance in 2022 across three categories: percentage growth in AUM, monetary growth in AUM, and percentage growth in employees. They crunch those numbers into a single figure known as the ‘growth factor’: the end result is what is presented in the ranking. As you’ll see, the competition is tougher in some states (New York, California, Texas) than in others (North Dakota, Hawaii).

They reach out to firms for this report, the firms don’t contact Citywire. No one is paid or compensated for their appearance, nor is Citywire.

Source: Wenik. 50 Growers Across America 2023. Digital.citywire.com

Ranked by value of assets under management as of December 31, 2022. The source is Business Alabama surveys.

Financial Planning and Investment Advisory Firms 2023

CNBC’s Proprietary Criteria for FA 100

The methodology consisted of first analyzing a variety of core data points from AccuPoint Solutions’ proprietary database of registered investment advisors. This analysis started with an initial list of 39,818 RIA firms from the Securities and Exchange Commission regulatory database. Through a process, the list was eventually cut to 904 RIAs, with those firms meeting CNBC’s proprietary criteria.

CNBC staff sent an extensive email survey to all those firms that met the initial criteria to gather more details. In turn, those advisory firms wishing to be ranked filled out the comprehensive application in regard to their practice. The CNBC team verified that data with those firms and with the SEC regulatory database. AccuPoint once again applied CNBC’s proprietary weighted categories to further refine and rank the firms, ultimately creating the list of the top 100.

CNBC does not charge any type of fee to advisors to be listed in the annual ranking.

The primary data points used in the analysis were reviewed, either as a minimum baseline or within a range, eliminating those firms that did not meet CNBC’s requirements. Once the initial list was compiled, weightings were also applied accordingly. These data points included:

  • Advisory firm’s regulatory/compliance record (editor’s note: Any firm that had a disclosure on its SEC ADV was automatically disqualified from the ranking)
  • Number of years in the business
  • Number of certified financial planners
  • Number of employees
  • Number of investment advisors registered with the firm
  • The ratio of investment advisors to total number of employees
  • Total assets under management
  • Percentage of discretionary assets under management
  • Total accounts under management
  • Number of states where the RIA is registered
  • Country of domicile.

 

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