If you're looking for a registered investment advisor (RIA) but don't know where to start, look no further. The Wall Street Journal releases a list of the Top 40 wealth management firms annually. The rankings are based on U.S high-net-worth private-client assets under management (AUM) in accounts worth over $5 million.
- High-net-worth individuals often seek a professional to manage their money.
- While size isn't everything, a large sum of assets under management is a signal that the firm attracts an affluent clientele.
- The rankings here reflect the top 10 investment management firms by assets and net income.
1. Bank of America
The Bank of America Corp.'s Global Wealth & Investment Management division is ranked number one on the list with $1.35 trillion in AUM. One reason that Bank of America is ranked so high is that it acquired Merrill Lynch in the aftermath of the 2008 financial crisis.
The Global Wealth & Investment Management division focuses on two types of clients: people with over $250,000 in total investable assets and high-net-worth individuals for whom Bank of America can provide comprehensive wealth management solutions.
It has more than 20,000 wealth managers in 750 branches. In 2018, Bank of America's Global Wealth & Investment Management division had a net income of $4.1 billion, up 33% from the previous year.
Bank of America’s Global Wealth & Investment Management absorbed Merrill Lynch during the 2008-2009 financial crisis.
2. Morgan Stanley
Morgan Stanley Wealth Management ranks second on the list with $1.26 trillion in AUM. It has more than 15,600 wealth managers in nearly 600 branches.
In 2018, net revenues rose 6% from 2017 to $40.1 billion. Both its asset management and net interest income revenues increased, which helps explain the firm's growth. Its net income was $8.9 billion in 2018, an increase of 44% from the prior year.
3. J.P. Morgan
J.P. Morgan Private Bank, now part of JPMorgan Chase & Co., is the third-largest wealth management firm with $774 billion in AUM. Its wealth management division has 1,300 wealth managers in only 48 branch offices. In 2018, assets for J.P. Morgan Private Bank was 28% of its total AUM.
4. Wells Fargo
Falling right behind UBS is Wells Fargo & Company with $604 billion in AUM. The firm has almost 15,000 wealth managers in 1,468 branches.
In 2018, its total revenue was $86.4 billion, a roughly 2% fall from the previous year. However, net income rose 1% to $22.4 billion for the same period.
UBS Wealth Management is in fifth place on the Wall Street Journal's Top 40 wealth management firms with $601 billion in AUM. It has 7,100 wealth managers in 208 U.S. branch offices.
As UBS is not an American company, it files a 20-F instead of a 10-K. According to that report, for fiscal 2018, UBS had an operating income of $30.2 billion, a 2% increase from the prior year.
6. Charles Schwab
With $421 billion in AUM, Charles Schwab places sixth on the list. The company employs 2,000 wealth managers and has 345 U.S. branch offices.
In Charles Schwab's current structure, wealth management falls under the umbrella of Investor Services. In 2018, net revenue for investor services increased by 18% from the prior year. This growth is in large part due to increases in asset management and administration fees.
7. Vanguard Group
In sixth place is The Vanguard Group with $406 billion in AUM.
Vanguard differs from its competition on this list as it is client-owned rather than publicly traded or privately owned. As a result, Vanguard is able to focus more on clients while offering them a plethora of investment opportunities such as low-cost mutual funds, ETFs, advice, and other related services.
Fidelity Investments ranks eight on this list, with $400 billion in AUM. It has about 2,400 wealth managers in almost 200 offices.
Fidelity has two types of wealth services: Wealth Management, which requires a minimum investment of $250,000, and Private Wealth Management, which requires a minimum investment of $2 million.
9. Goldman Sachs
The Goldman Sachs Group, Inc. is the eighth-largest wealth management fund with $300 billion in AUM. It has 500 wealth managers operating in 13 branches.
Goldman Sachs requires a minimum of $10 million in accounts.
Like Charles Schwab, Goldman Sachs reports its wealth advisory services under an overarching segment: Investment Management. In 2018, Goldman Sachs reported net revenues of $7 billion for this segment, which is an increase of 11% from the previous year.
10. Northern Trust
Rounding out the top ten is Northern Trust with $260 billion in AUM. It has 680 wealth managers in 62 branches.
The firm caters to ultra-high net worth individuals. In 2018, Northern Trust’s revenue hit $5.96 billion, an increase of 11% over the past year.