As published 2/21/15 in
The greatest concern of most investors isn’t this year’s cooling of stocks, or plunge in oil prices, or even the prospect of higher taxes. Instead, it’s the same problem that has been dogging investors for more than five years: where to find decent income. With interest rates seemingly cemented near record lows, the financial advisors on our annual Top 1,200 list say their clients are persistently pressing them to find some yield, any yield. “Producing income is kind of the great commodity out there,” says R. Scott Runia, Utah’s No. 1 advisor in our 2015 Top 1,200 Advisors ranking.
Runia, along with his fellow top advisors throughout the country, have their work cut out for them: Yields on the benchmark U.S. 10-year Treasury, at about 2%, are barely outpacing inflation. But failure isn’t an option for this bunch. Our top advisors are sniffing out solid income opportunities everywhere from muni bonds to blue-chip dividend stocks to real estate investment trusts.
The Top 1,200, drawn from all 50 states plus the District of Columbia, are fielding plenty of other questions these days, too — from the outlook for energy stocks to the chances of economic improvement in Europe and China to emerging markets in general. It’s a full plate, but these advisors have solid track records of spotting opportunity and heading off trouble.
In this special report, we provide complete listings of the top financial advisors in each state. These are the most comprehensive of all the advisor listings we run each year. We also delve into the thinking of the state leaders in 51 profiles. Some 17 states have new No. 1 advisors this year.
The rankings, covering advisors at Wall Street firms and independent outfits, are based on assets under management, revenues generated by advisors for their firms, and quality of practices. In evaluating advisors, we examine regulatory records, internal company documents, and extensive questionnaires filled out by the advisors themselves.
Investment performance is not an explicit criterion because the advisors pursue a wide range of investment goals for their clients. Since their clients are typically wealthy, advisors may simply focus on preserving their assets.
Our Top 1,200 are managing more assets than they did last year, thanks to both rising markets and new clients. The average advisor and his or her team this year manages $2.42 billion, up from $2.16 billion in 2014 and $2.14 billion in 2013. Revenues have risen accordingly, to $7 million from $6 million last year.
Meanwhile, the teams themselves are growing in size. The average advisory team is now about 11 people, up from eight a few years ago.
THIS YEAR’S BIG MOVERS include Gregory Vaughan, who vaulted to the top spot in California from No. 4 last year. Vaughan and his veteran team, based in Menlo Park, benefited from the burgeoning initial-public-offering and mergers-and-acquisitions environment in the tech sector. As tech executives’ private stock becomes public shares, they’ve been turning to the Morgan Stanley team for guidance.
Others who made the jump to the top of their state’s ranking include Patrick Dwyer, in Florida; Dan Pinkerton, in Idaho; Jeremiah Burns, in Maine; Robert Bonfiglio, in New Hampshire; Mark Lippman, in New Jersey; Judith McGee, in Oregon; and Joseph Montgomery, in Virginia.
When it comes to portfolio returns, our 2015 top advisors have a tough act to follow. Stocks and bonds creamed expectations last year: The Standard & Poor’s 500 rose 11.4%, and the Barclays U.S. Aggregate Bond Index climbed 6%, its best showing in three years.
So far in 2015, the S&P is up just 2%, and the Barclays bond measure is up 0.7%. To find extra juice for their clients’ portfolios, our advisors are looking toward sectors that have been buffeted by bad news, including Europe, the oil industry, and emerging markets. They’re also avoiding undue risk — investing heavily in domestic blue-chip stocks, and in many cases maintaining a significant allocation to bonds.
If there’s one thing that just about all of our top advisors agree on, it’s that the stock market is unlikely to repeat its strong performance of 2014 — much less hold a candle to 2013’s 30% returns.
Still, advisors like Jeremiah Burns, in Portland, Maine, see plenty of room for the bull market to run. Burns believes that pensions and endowments will have to increase their exposure to stocks in order to earn their required returns; that should provide a market tail wind, he says.
A big question this year is whether blue-chip companies can maintain their momentum from last year. McGee is not so sure: “People will [typically] overweight to yesterday’s returns and that’s always the risk.”
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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Stock investing involves risk including loss of principal. The payment of dividends is not guaranteed. Companies may reduce or eliminate the payment of dividends at any given time.
Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price.
Investing in Real Estate Investment Trusts (REITs) involves special risks such as potential illiquidity and may not be suitable for all investors. There is no assurance that the investment objectives of this program will be attained.
International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.