Careful Planning Drives Demand for Wealth Advisors

Smart investments, especially in real estate, and new clients combined to raise the asset values of wealth management firms on the San Fernando Valley Business Journal’s List of Largest Money Management Firms. With the start of a new year, these advisors anticipate a more active approach to investing by their clients as well as new opportunities for raising returns on their clients’ money. Wealth management advisors are in demand as high net worth individuals and families have been personally affected by the stock market’s wild fluctuations. That demand, meanwhile, has prompted area firms to ramp up hiring and expand or open new offices. But the economy is still sputtering, and uncertainty at both the national and international levels has led clients to seek more immediate results, said Jeff Winklhofer, the manager of the Encino branch of Raymond James Financial Services. “People are getting less patient for generating returns,” said Winklhofer. “They are not making any huge changes; they still believe in diversification.” Clients who seek wealth management services may have as little as $50,000 to invest, or as much as millions. Generally, these investors are private people, and their advisors go to great lengths to ensure that privacy. The Money Management List is a mix of local offices of national firms and small regional advisory and management companies. Topping the List is American Realty Advisors with assets of more than $4 billion through the first nine months of 2011, managed from its Glendale headquarters. The firm invests in industrial, office, apartments and retail shopping centers for public and corporate pension funds, endowments, and foundations. The company has a policy of not discussing its investing policies, said Jay Butterfield, managing director, Fund/Separate Account Operations. American Realty added to its investments recently by buying multi-tenant office buildings in Colorado and Illinois, and a luxury apartment complex in Houston. Morton Capital Management in Calabasas has also profited by investing in real estate. With banks still restrictive in their lending practices as they rebuild their balance sheets, private investment has stepped in to help owners refinance or to buy properties outright, said Lon Morton, the firm’s president. “There has been real opportunity but not necessarily in California, especially with multi-family housing,” Morton said. “We met with a great deal of success in the apartment houses we bought.” Morton Capital purchased 5,000 units in various areas around the country in 2011, Morton said. Legacy Wealth Partners in Woodland Hills did not have the best 2011 but still saw its assets rise by nearly 12 percent. Firm President Brad Levin attributes that growth to new clients that have come through referrals and a sense of frustration that the advice they had been receiving was not keyed into the current economic conditions. Legacy’s proactive approach, and its ongoing communication with clients about their portfolios and investment options are responsible for much of the firm’s growth, Levin said. “People feel comfortable when they know someone is looking out for them and monitoring their personal finance needs and responding to that,” he added. Several firms on the List experienced growth spurts during 2011. BNY Mellon Wealth Management added five sales directors and four service representatives in the Los Angeles area. The Encino office of Wells Fargo Advisors, which opened in 2007, is packed to capacity with 50 employees, and more staff likely will be added to accommodate the growing demand. Wells Fargo also is seriously considering investing in the Santa Clarita Valley. Morton Capital is not looking to hire right now because there is plenty of work for seven portfolio managers and the 15 other employees, Morton said. Uncertainty in the global economy, he added, is another reason the firm is reluctant to hire new employees. “If a slowdown is greater than expected, especially in Asia and China, it will affect asset prices and earnings for firms like ourselves,” Morton said. Download the 2012 LARGEST MONEY MANAGEMENT Firms list (pdf)