RIAs Target Large Brokerages

Top brokerages typically only charge for buying, selling, and managing investments. Very rarely, do they charge a flat fee for advice. Perhaps one of the biggest innovative ideas coming from top RIAs is the idea of offering financial advice—at a cost. And it has disrupted an industry stuck on old ideas.
The top ranking registered investment advisers that offer fee-only services reflects a miscellany of different business models. Each has their specific niche—for example,, the largest ranking firm, Financial Engines Advisors operates $104.4 billion in AUM and relies exclusively on providing fee-only advice to employer-sponsored retirement plans. In the top 10, there are two other players—Fisher Investments and Edelman Financial Services have been able to disrupt the industry and attract thousands of clients through strategic mass marketing efforts.
Ultimately, the majority of the top ranking RIAs are traditionally operated firms that can stand up strong against competition from the largest brokerage houses as far as wealthy clients are concerned. Collectively, the ten largest firms account for $300B AUM, and every single one of the ten largest RIAs has no less than $11B under management.
The size of their portfolios are not reflected in the operation style—these are all traditional RIAs that are relatively quiet businesses that operate as large family-oriented practices that focus on clients with more than $5 million. They don’t make a lot of waves with news of acquisitions. They focus on organic growth.
This is an indicator of the simplicity of the business. There’s less of a silver bullet and more of a reliance on execution.
One of the key aspects for many of these firms’ success is to get wealthy clients to go all in. Often, these high-net-worth clients split up assets between some different advisory firms. Some of these firms make this mandatory to avoid a lack of access accurate, complete information and racing against the clock with other consultants.
Despite all the success these top RIAs have enjoyed, there is no rest on the schedule. Many are still scaling at an impressable rate. Fourth on the top 10 list, Chevy Chase Trust added $3B in 2014 alone, allowing the firm to enjoy $21B in AUM. There are smaller fee-only firms that are growing even more exponentially—even as much as 165% as the firm, Halbert Hargrove, for example.