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Tuesday, May 28, 2024

Orange County’s RIAs Continue to Grow

The 30 biggest registered independent advisers with offices in Orange County doubled their companywide discretionary assets under management (AUM) to $403.9 billion from the same period three years ago.
“The industry’s definitely growing” in Orange County, said David Bahnsen, owner of Newport Beach-based Bahnsen Group. “There’s a lot of succession planning going on. And the main source of growth is people at big wirehouse firms [a full-service broker-dealer] going independent. That’s billions of dollars a year.”

The RIAs on this week’s list are ranked by discretionary assets under management, a category where the adviser makes trades in an investor’s account without approval and is sometimes known as outsourced investing.

The Business Journal compares AUM to assets from three years ago, to smooth out one-time anomalies and a three-year period is a typical performance measurement on Wall Street.

The RIAs must be registered with the Securities and Exchange Commission.

Thirty firms made the list, which was cut off at $1 billion in assets. Their average annual growth in the past three years was 28%.

The 30 largest employed 925 in Orange County, including 389 registered advisers, up 6.2% and 4.9% respectively.

Newport Beach is the favorite location with 14 offices, followed by Irvine with 10 and Costa Mesa with three.  

Bahnsen Boost

RIAs often say they give independent advice to avoid conflicts, such as broker-dealers that may be promoting their company’s own investment funds or selling insurance products alongside stock picks (see separate article on broker- dealers, page 22). The RIAs say they don’t receive hidden fees and typically are paid about 1% of the assets as annual compensation.

The Bahnsen Group reported assets under management more than doubled to $2.5 billion in the past three years.

Bahnsen attributed part of his firm’s growth to reopening his office a year ago for face-to-face meetings while some of his competitors are still working from their homes because of the pandemic. This year may be his best year as he’s already added another $500 million to $3 billion in assets.

Bahnsen, who is a trustee at the conservative National Review publication, also believes his conservative views have helped.

“We put out more content than anybody—TV and books and podcasts—they are the gifts that keep on giving because people love information,” Bahnsen said. “Although some may not always agree, we have tapped into something unique.”


The 30 largest firms also boosted their non-discretionary assets under management to $175.2 billion, up 13.5% from $119.7 billion in 2017.

Non-discretionary assets under management is a category where a manager cannot make decisions without the approval of the investor. The discretionary model has become more popular in recent years as a way for money managers to react more quickly to changing market dynamics.

Some investment firms don’t fit neatly into our list.

For example, Newport Beach’s Canterbury Consulting Inc., which is prominent for advising nonprofits, has $1.66 billion in discretionary assets and another $3.48 billion in non-discretionary funds. They also have $22 billion in another category called assets under advisement where the firm makes recommendations but doesn’t have the authority to execute or facilitate trades for clients.

The RIA industry growth is not only a reflection of appreciation of the investments and clients adding additional funds but also acquisitions.

One such firm is Newport Beach’s Beacon Pointe Advisors, which has tripled to $9.6 billion from three years ago. Its non-discretionary assets also climbed 5.2% to $2.8 billion. In 2020, it made four acquisitions alone. It should get even bigger as it acquired two Texas RIAs in the past three months, Wealthstreet Investment Advisors with $1.2 billion, and D.R. Saur Financial with $230 million.


WCM Investment Management of Laguna Beach is now the biggest RIA in Orange County, managing $71.8 billion, up from $14 billion three years ago.

The low-key firm, which declined requests for comment, has 11 funds that focus on small cap to growth to international to China.

Its biggest fund, Focused International Growth Fund, or WCMIX, has $22.9 billion, up fourfold from $5.9 billion in 2017. It’s had an 11% annual return since its inception in 2011.

While founded in 1976, it later changed hands to current principal owners and co-chief executives Kurt Winrich, who joined in 1984, and Paul Black, who came on in 1989. The company works only with wealthy individual and institutional investors, as its minimum account size is $10 million.

• Newport Beach’s Research Affiliates LLC, which was started by Rob Arnott, creator of the Smart Beta investment style, has seen its AUM triple to $29.5 billion from three years ago. Research Affiliates is closely tied to giant money manager and neighbor Pimco.

• Some of the RIAs said that while they are registered, they actually don’t solicit business for the public and instead work for family firms.

Such is the case with MIG Capital LLC, which manages the wealth of the Merage family, whose patriarch Paul Merage made his fortune through the sale of the iconic Hot Pockets and Lean Pockets brand and for whom the business school at the University of California, Irvine is named. Its discretionary assets have risen to $1.16 billion from $806 million three years ago. 

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Peter J. Brennan
Peter J. Brennan
Peter J. Brennan has been a journalist for 40 years. He spent a decade in Latin America covering wars, narcotic traffickers, earthquakes, and business. His resume includes 15 years at Bloomberg News where his headlines and articles sometimes moved the market caps of companies he covered by hundreds of millions of dollars. His articles have been published worldwide, including the New York Times and the Washington Post; he's appeared on CNN, CBC, BBC, and Bloomberg TV. He was awarded a Kiplinger Fellowship at The Ohio State University.

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