The firm’s former CEO, Maria Elena
“Mel” Lagomasino, a vocal advocate for
a fiduciary standard of client care, was
replaced. Meanwhile, last year’s No. 3,
Veritable, sold a controlling stake to a
consolidator of money management
firms, Affiliated Managers Group, in
order to solve succession issues.
In addition, the No. 7 firm on this
year’s list, Luminous Capital, was in the
process last month of selling itself to
First Republic Bank reportedly for more
than $100million. Luminous appears
on the list because at the time data was
measured — using SEC filings from October — the deal had not gone through. In
a quiet period because of the pending
transaction, the founders of Luminous
declined to be interviewed.
The firm was founded by former
brokers from Merrill Lynch who broke
away in a high-profile departure in
2008. One expert familiar with the
deal said ownership by First Republic
would offer Luminous and its clients
easy access to loans and might not substantially compromise its objectivity.
Not surprisingly, CEOs of other firms
atop this year’s list strenuously disagreed with this prediction. “More and
more people are wanting to hold themselves out as holistic planners,” says
Russ Crosson, CEO of Ronald Blue &
Co. in Atlanta, which is No. 4 this year.
“I think it’s harder for other entities that
have other [outside] ownership.”
“People perish for lack of vision,” says Russ Crosson, CEO of No. 4 RIA firm Ronald Blue & Co. in Atlanta. “Around here we say we want o create a 100-year firm.”
ONE FIRM’S PATH
The founders of Shepherd Kaplan attribute their explosive growth — to $7.7 billion in AUM in only 14 years — directly
to their independence. But the firm
also followed an unusual path. It was
founded to manage large investment
portfolios for corporations and pension
funds. To do so, it built systems to manage these assets with unusual transparency and accountability for demanding
clients, according to Shepherd and co-founder David Kaplan.
Eventually, the CEOs and executives
of those firms wanted the same pro-
cesses to apply to their own personal
financial planning, the pair say. Refer-
rals drew in more executive clients and
a broader population of private clients.
The firm’s assets are now divided about
evenly between private and institu-
tional wealth, with a minimum account
size of $20 million.
Ann Marsh is the senior editor and
West Coast bureau chief of Financial