The rise of Super-Ensembles signals a profound shift in the advisory industry, forcing firms to reassess their growth strategies, according to a recent Pershing study.
A group of 250 advisory firms is shaping the future of the industry and setting the standard for pace of growth, productivity, client service and best practices for career tracks and succession. These “super-ensemble” firms are highly regarded by their peers and seen as an example to follow. They are the employers of choice for talented people joining the industry. Increasingly, they are becoming a well-known brand that clients recognize. Some are expanding in multiple markets and creating national presence. All are successful and powerful competitors that every advisor needs to be aware of.
“Super-ensembles are firms from which every business owner can learn, and their business practices are quickly becoming the standard to follow for the rest of the industry.”Pershing Advisor Solutions
Super-ensembles are firms from which every business owner can learn, and their business practices are quickly becoming the standard to follow for the rest of the industry. This is why we believe it is important to study and understand super-ensembles — who they are, where they came from and where they are going. This paper will examine these questions and find answers that can help firms of every size learn from the largest firms in the industry and define their strategy for competing against them.
Growth does not stop at a billion. On the contrary, most super-ensembles are asking, “How do we get to $5 billion?” The largest firms of today stand at $15 to $20 billion in AUM. There are only 28 firms with over $5 billion in AUM according to a list compiled and published by Financial Advisor magazine4. However, if this rate of growth continues (23.7% growth in AUM in 2014 for super-ensembles), we can expect to see today’s $2 billion firms reach $5 billion in only five years. That means another 70 to 100 firms will reach the $5 billion level by 2020 based on growth and math alone. According to the 2014 InvestmentNews Study, 47% of super-ensembles say their No. 1 strategic priority is revenue growth, while 12% say they are focused on mergers and acquisitions. Twenty-nine percent list organizational development—the internal view of growth—as their focus. Studying how the largest firms in the industry deal with growth reveals the path that a super-ensemble must take to reach $5 billion:
©2015 Pershing Advisor Solutions LLC. Pershing Advisor Solutions LLC, member FINRA, SIPC, is a wholly owned subsidiary of The Bank of New York Mellon Corporation (BNY Mellon). Clearing, custody or other brokerage services may be provided by Pershing LLC, member FINRA, NYSE, SIPC. Pershing Advisor Solutions relies on its affiliate Pershing LLC to provide execution services. Bank custody and private banking solutions are provided by BNY Mellon, N.A., member FDIC, a wholly owned subsidiary of The Bank of New York Mellon Corporation. Except with respect to uninvested cash held in a bank deposit account chosen by client as part of a sweep election, assets custodied at BNY Mellon, N.A. are segregated from the general assets of BNY Mellon, N.A. Trademark(s) belong to their respective owners. For professional use only.
Director, Pershing Advisor Solutions, a BNY Mellon company
Gabriel Garcia is Director for Pershing Advisor Solutions, a BNY Mellon company. He is responsible for managing the national Relationship Management and Consulting group. Gabe and his team work with registered investment advisors (RIAs) to develop and grow their practices and make informed decisions on how to evolve their firms and manage business issues. His team helps advisors maximize Pershing’s resources to become more scalable, profitable and productive.View Profile