Figuring out where to work is one of the most important decisions a wealth manager has to make. Putting an employer’s compensation package aside, the choice often comes down to choosing between familiar local turf, large metropolitan areas with high concentrations of wealth or under-served markets with potential.
The nation’s biggest markets, with some exceptions, dominate the list of “top ten cities for finance jobs” released last week by Accounting Principals, a staffing provider for financial service and accounting positions.
Houston topped the list, while Richmond, Va. came in a surprising second, followed by New York, San Francisco, Atlanta and Dallas. Tulsa, Oklahoma placed seventh, followed by Kansas City, Raleigh, N.C. and Chicago.
Cities with fast-growing industries did particularly well in the rankings, and are drawing the attention of advisors and wealth managers who are following the influx of corporate executives and entrepreneurs, said Jodi Chavez, senior vice president for Accounting Principals.
Richmond benefited from an influx of financial service companies moving to the city, while Houston and Dallas were good examples of markets with diversified industries and a strong business environment becoming more attractive to financial advisors, Chavez said.
Touting Texas
In fact, Oklahoma-based Adams Hall Asset Management announced last week it was opening an office in Dallas, to be headed by Scott Mills, former wealth manager at UBS.
“We think there are tremendous opportunities in Dallas,” Mills said, citing the metro areas’ population of six million people, two dozen Fortune 500 companies and the energy industry that anchors the local economy.
“But the economy is also becoming more diversified with biotech, high-tech and software companies and has become a hotbed of entrepreneurial activity,” he added. “More and more people are branching out on their own and they need fiduciary services.”
Wealth management hasn’t kept up with the city’s growth, according to Mills. “There’s still room to come in,” he said. “More wealth is being created, and the needs of clients are shifting from broker-dealers to RIAs and wealth managers.”
Houston, Austin and San Antonio are also prime markets for wealth managers, according to Tim White, managing partner for Kaye/Bassman Corp., a leading wealth management executive search firm based in Dallas.
“Texas really does have an accommodating culture when it comes to business,” White said. “If you want to start a business here, there’s nothing in your way. You’re seeing all kinds of companies being started, and people are going to need help as they grow their businesses and later monetize it.”
And for wealth managers looking for opportunities at the high end of the market, New York, London, Paris and Hong Kong are expected to remain the most attractive cities for ultra-wealthy individuals for the next ten years, according to the recently released 2012 Wealth Report, issued by Citi Private Bank and Knight Frank, an international real estate consultancy firm.
Small Is Beautiful
But less glamorous cities like Richmond, Tulsa and Raleigh shouldn’t be overlooked, said Chavez. “I think the real story from our list this year is that a lot of good things are happening in smaller cities,” she said.
Indeed, research released last month by eFinancialCareers, an online jobs site, makes a statistical case for “wealth management opportunities” in some of the nation’s most under-served markets. Only 400 financial advisors, for example, serve the entire Nashville, Tennessee market, best known as the capital of the country music industry, but also home to thriving health care, banking and transportation businesses.
Naples and Macro Island, Florida have more than 12,000 millionaires and just 300 financial advisors; while in Alaska the ratio of millionaires to advisors is 114 to 1, the company reports, citing the Bureau of Labor Statistics. In addition, the New Orleans markets’ population of 1.2 million is serviced by only 340 advisors and San Antonio, the nation’s fastest growing city, according to the U.S. Census Bureau, has 1,500 advisors for a population of 2.1 million.
By contrast, the metropolitan New York market, the country’s largest – and center of the financial services industry – has 23, 400 advisors serving a population of over 19 million people.
“It’s like a matrix,” said Constance Melrose, managing director of eFinancialCareers North America, who is conducting the research for the company. “The further away you are from the places that are most familiar, the better chance you have of finding a good entry point.”
Beyond Statistics
But financial advisors shouldn’t base their decision on where to work on statistics alone, experts caution.
Having good contacts and “centers of influence” should be a critical factor in any decision, according to Danny Sarch, president of Leitner Sarch Consultants, a White Plains, N.Y.- based executive search firm for financial advisors and broker-dealers.
Sarch recalled a New York-based advisor he worked with who fell in love with a southern city that was under-served and appeared to have great business potential. “Everyone he knew was in New York, and they didn’t keep their business with him when he left,” Sarch said. “Plus he was a real New Yorker and like a fish out of water in the south. The move turned out to be a disaster.”
Search executive Tim White said he advises young people starting out in the business to make an area that fits their world view and lifestyle the first priority in choosing a location. “You have to live your life first,” he said. “And you’re going to prosper most where you’re happiest, and meet people who can see that you’re enjoying your life.”
