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Brand New RIA Explains Billion-Dollar Growth

By Garrett Keyes October 17, 2018

Over the course of a three-month period, Chicago-based RIA Cresset Wealth Advisors gained $1 billion in new business, increasing its market share from $2 billion to $3 billion, according to a press release from the company. Cresset Wealth Advisors sits within the suite of services offered by Cresset Asset Management, co-founded by Eric Becker and Avy Stein, two private equity investors. Cresset Wealth Advisors also offers clients access to direct investments in real estate, private equity, and secondary opportunities through the private investing arm of its business Cresset Partners. Sitting down with FA-IQ, Cresset CEO Doug Regan explains what challenges Cresset has faced and how it managed to achieve its considerable quarterly growth.

Q: A Cresset press release says the firm has added 60 team members and grown by $1 billion dollars from June to September. How has Cresset managed to grow so quickly?

A: In terms of clients added, we crossed the $2 billion-dollar AUM mark in June by having a significant number of new clients come onto the platform. The $1 billion-dollar growth was also organic, and represents the number of new clients and advisors we’ve brought onto the platform.

Q:How specifically has Cresset achieved its rapid growth?

A:We have a two-pronged strategy. We reach out to culturally compatible advisors and direct client opportunities. Culturally compatible advisors are advisors who always put the client first, appreciate an open source platform, and recognize the importance of private investment in a diversified portfolio.

Q:How has Cresset used marketing to attract new clients?

A:Clients are finding their way to us through the reputation we are creating through our media presence and client referrals. Happy clients are telling their friends because of the quality of the FAs we are bringing onto our platform. And after advisors are leaving other firms, their clients are choosing to reach out to them to continue having them as their advisor.

Q: What growing pains has Cresset experienced with its growth?

A: Growing pains haven’t come from the rapid expansion. But Cresset does have to constantly be focused on making sure operations keep pace with innovations [demanded by clients]. Clients have asked us to report on their entire balance sheet of assets and clients often have assets with various providers. But by using technology we can aggregate all their assets and show them a consolidated view of their total net worth.

Q:How challenging was establishing and growing the infrastructure that lets Cresset report on its clients’ entire balance sheet? What tools does Cresset use to provide clients this service?

A:We have a partnership with Addepar, which allows us to aggregate all clients assets. Addepar is partnered with other firms but it’s a very sophisticated platform and not everyone can use it.

Addepar is a financial technology company offering a financial software platform that can aggregate client assets.

Q: Why are advisors and clients choosing to join Cresset? Which client segments do you serve?

A: Clients are responding to the open source and unconflicted ideas Cresset presents to manage their wealth. In addition to deep financial planning and exposure to public markets, Cresset offers clients the opportunity to invest in private real estate and private operating company investment opportunities.

We cover the entire waterfront of clients across the entire personal wealth spectrum, from retail to ultra-high net worth. And we scale based on the complexity of our clients and work with clients across generations, from young entrepreneurs to people planning to enter retirement.

Doug Regan

Q:How do private investment offerings fit into Cresset’s growth plan?

A:Our clients are responding to the opportunity to invest in private deals directly without the cumbersome aspects of investing through funds. We view direct private access as an important growth opportunity for our firm which will ultimately benefit clients suited to these kinds of investments.

Q: Where does Cresset aim to be five years from now? Do you foresee Cresset continuing to grow at the same pace?

A: We are extremely encouraged by the response we are receiving from prospective clients and centers of influence. If we keep delivering on our brand promises I am confident Cresset will have a very bright future. Cresset does not have a specific market value goal. Having a target AUM five years from now puts the focus on us and not our clients. A lot of firms put a number out there, but we are focused on the client. Our goal is just to work with as many clients as Cresset can possibly serve.

* This interview has been edited for brevity and clarity.