The 2012 San Diego Business Journal list of Wealth Management Firms includes different types of companies who are in the broadly defined category of wealth management. Among the various types are financial planners, financial advisers, investment advisory firms, large multinational full-service brokerages, money managers, and independent registered investment advisors.
The criterion for ranking the list is the total assets managed in San Diego County as of fiscal year end 2011; the assets under management total $108.5 billion for the 33 firms participating.
Brandes Investment Partners LP, No. 1 on the list, is an investment advisory firm, managing equity and fixed income assets for institutional and private clients worldwide, according to the company website. Founded in 1974 by Charles Brandes, the firm’s success is attributed to the value investing approach to security selection. This approach was pioneered by Benjamin Graham, known as the “father of value investing” and author of the seminal book on the subject “Security Analysis,” co-authored with David Dodd — also known as the Graham and Dodd approach to investing. Warren Buffett, one of the most well-known investors in the world, is among Graham’s protégés.
Brandes has $33 billion in assets under management in San Diego County with 28 portfolio managers or investment advisers. Worldwide, the firm has 407 employees.
Full-Service Brokerages
Merrill Lynch Wealth Management is No. 2 on the list. Merrill Lynch is the wealth management division of Bank of America. Merrill has $18.5 billion of assets under management in San Diego County in 2011, up 5 percent from $17.6 billion in 2010. Merrill has 182 local portfolio or investment advisers.
Wells Fargo Private Bank, ranked No. 3, is new to the list this year. Wells has 66 local portfolio managers or investment advisers in San Diego County. Total assets under management in the county for fiscal year end 2011 reported by Wells were $10 billion, up 18 percent from $8.5 billion in 2010.
Also new to the list is Morgan Stanley Smith Barney – The Bentley Group at No. 15 with five local portfolio managers. The group reported an impressive 30 percent increase in assets under management locally from $250 million in 2010 to $325 million in 2011.
The Bentley Group is a partnership of financial advisers within Morgan Stanley Smith Barney, formed by Russell M. Hall, senior vice president and Michael F. Souza, vice president, Michael A. Tedesco, first vice president and financial advisor corporate client group director, and Bryan C. Gould, financial adviser.
Fee-Only Firms
There are several ‘fee-only’ firms on the list that sell no products and are not tied to any brokerage; rather they receive a percentage of the assets under management. This arrangement ostensibly eliminates the conflicts of interest built into traditional financial planning and management models where the advisers receive a commission on the products they sell. Among the fee-only firms are Pure Financial Advisors, No. 13; Hokanson Associates, No. 14; Blankinship & Foster LLC, No. 16; Callan Capital, No. 17; and Cornerstone Wealth Management LLC, No. 19.
San Diego-based Pure Financial Advisors, No. 13 on the list, up from No. 23 in 2011, is a fee-only wealth management firm.
Pure reported an impressive 59 percent increase in assets under management in the county for 2011 of $414.4 million, up from $262.3 million in 2011.
“Our growth is primarily due to our business model, it’s different from most other fee-only advisers,” said Michael Fenison, founder and CEO. “Our advisors are on a fixed salary.”
Fenison also attributes the growth of the firm to his philosophy of giving a lot to his clients at no charge.
“We do a thorough assessment that can take four to six hours of planning; our goal is to have our clients fully educated.”
Fenison added that in addition to the traditional wealth management strategies, the firm focuses extensively on tax management and long-term tax liability. “Tax liability is something they can control.”
Fenison retired in 2007 from a career with ING and started the company at the early stages of the financial collapse that plunged the nation into the Great Recession.
“When the market does poorly, all the details matter,” Fenison said. “It actually was to our advantage.”