2018 FT Top 400 Financial Advisers List - Methodology
2018 Financial Times Top 400 Financial Advisers list
Methodology (as worded by the Financial Times)
With the Financial Times 400, we aim to provide a snapshot of the best financial advisers for the investors who use them — such as FT readers. We assess advisers based on what investor care about, and we use a quantifiable, objective methodology.
The Financial Times and Ignites Research, the FT’s sister company, contacted the largest US brokerages in autumn 2017 to obtain practice information and data for their top advisers across the US. This resulted in verified data on assets under management instead of relying on advisers’ self-reported figures.
We asked for information on advisers with more than 10 years’ experience and that had more than $300m in assets under management. Such minimum criteria filtered out most advisers.
The FT then invited qualifying advisers out of this group — a list which totalled roughly 880 — to complete a short questionnaire that gave us more information about their practices. We added that information to our own research on the candidates, including data from regulatory filings.
The formula the FT uses to grade advisers is based on six broad factors and calculates a numeric score for each adviser. The factors were:
- Assets under management can signal experience managing money and client trust.
- AUM growth rate (we look at both one-year and two-year growth rates) can be taken as a proxy for performance, asset retention and ability to generate new business.
- Years of experience indicates experience economic and interest-rate environments.
- Compliance record provides evidence of past client disputes. A string of complaints could signal problems.
- Industry certifications (CFA, CFP, etc) demonstrate technical and industry knowledge and obtaining these designations shows a professional commitment to investment skills.
- Online accessibility illustrates commitment to providing investors with easy access and transparent contact information.
Among the top factors in our scoring, assets under management accounted for an average of 70 per cent of each adviser’s score. Also, AUM growth rate accounted for an average of 17 per cent.
Additionally, the FT places a cap on the number of advisers from any one state that roughly corresponds to the distribution of millionaires across the US.
We present the FT 400 as an elite group, not a competitive ranking. We acknowledge that ranking the industry’s top advisers from 1 to 400 would be a futile exercise, since each takes different approaches to their practice and has different specialisations.
The research was conducted on behalf of the Financial Times by Ignites Research, a Financial Times sister publication.
Further Disclosure: Recognition from rating services or publications is no guarantee of future investment success or performance. Working with a highly rated advisor does not ensure that a client or prospective client will experience a higher level of performance of results. These ratings should not be construed as an endorsement of the advisor by any client nor are they representative of any one client’s evaluations. Additionally, the Firm is not aware of any undisclosed facts that would call into question the validity or appropriateness of the rating.