Due Diligence

SHOOK is completely independent and objective and does not receive compensation from financial advisors, their firms or the media in exchange for ranking purposes.

Selection Criteria

(Criteria for “Up & Comers” Millennials and Mothers is below)

We believe in rankings of “role models.” With 7 million Forbes magazine readers and 70 million monthly visitors to Forbes.com, plus 42 local publications, we take this very seriously.

To seek high-quality Advisors, SHOOK scours the financial services industry—banks, securities firms, custodians, insurance companies, clearing houses and others for nominations.

While many advisor rankings exist, only SHOOK Research provides deep due diligence, including interviews each FA over the phone and in person, and rigorous data verifications. **Our deep due diligence and data verifications are vital because data for all rankings is self-reported.**

We evaluate each advisor as if we are a prospective client—this includes meeting the advisor and his/her team in person. We will meet with just about every advisor that earns a spot on one of our rankings. (We may miss an advisor when we visit an area if, for example, he or she is out of town, but we’ll get back there eventually.) If we miss the advisor next time around as well, this is grounds to be not included in the SHOOK program.

Our due diligence begins before we meet with an advisor in person. Since each SHOOK Advisor represents each firm’s “cream of the crop,” and may represent their respective firm accordingly in the press and otherwise, each firm participates in the selection of their Advisors according to SHOOK criteria. In the interests of promoting best practices within the industry and serving the investing public, Firms nominate Advisors that have proven to best serve their clients’ needs with the highest levels of integrity and client focus. Once nominations are received, SHOOK’S deep due-diligence process takes over.

Research Summary (a/o July 2017)
– 19,616 nominations received (based on our thresholds)
– 4,486 invited & completed online survey
– 4,591 telephone interviews
– 893 in-person interviews at Advisors’ location

Basic Requirements

  • 7 years as a Financial Advisor (4 years for Millennials list).
  • Minimum 1 year at current firm, with exceptions (acquisitions, etc.)
  • Advisor must be recommended, and nominated, by Firm.
  • Completion of online survey.
  • Over 50% of revenue/production must be with individuals.
  • Acceptable compliance record.

Qualitative Criteria

When nominations are received, SHOOK studies each Advisors’ compliance and legal records—both public and private documents. Only Advisors with the highest ethical standards and integrity are considered. Leeway for pending actions and minor disputes may be given consideration; actions that are more serious in nature are thoroughly examined and may be considered after a rigorous process; consideration is also given for certain product failures and failures by firms, as well as  complaints that occurred in the past.

SHOOK then initiates discussions among various levels of management about each advisor. Further discussions are made with individuals in the Advisor’s office, as well as competing advisors in the local market—competitors often provide some of our best intel.

Client Satisfaction. As determined by the Advisor’s firm (with input from Management and Client-Satisfaction reports, and often self-reported). We may speak to clients, but it’s likely Advisors will connect us with only the happiest of clients.

Community involvement. Based on our experience, it is almost a given that these role models are also role models in their communities and in the industry.

We give added points for professional designations, but we also realize that years of experience can be a substitute.

Next, we interview the Advisor on the phone. This will determine if we take the time to visit the Advisor in person.

In person interviews: Nothing like looking someone in the eyes and interviewing. We act like we are prospective clients and look at factors such as planning, investing process, liability management, service model, asset allocation process, fee structure, and overall providing their Firm’s platform and full client experience. (This is probably far more than extensive than what a prospective client may ask, but we still encourage those to perform their own due diligence as well.) We also speak with select members of the team and evaluate how they function together.

Quantitative Criteria

If an Advisor has passed the qualitative markings, then it’s a given he or she is seeing success in the business. A happy client means referrals and providing the Advisor more of his or her assets to manage, and consequently higher revenue numbers.

We look at assets under management and custodied at his or her firm for the Advisor and for the team. We also look at assets that are managed by the Advisor but not custodied at his or her firm. We provide various weightings for various types of assets—non-“individual” assets, such as institutional assets, receive a smaller weighting. (Although individual numbers are used for ranking purposes, we publish the entire team’s assets.)

Revenue numbers. Gross revenue levels for non-institutional accounts over the past three years are considered, with a heavier weighting for revenue in most current year. Revenue growth rates are considered. For partnerships, each Advisor will be considered on his or her contribution.

**A note on portfolio performance.  When interviewing advisors, we talk about returns, but cannot evaluate performance nor recommend any advisor’s performance because returns are very rarely audited and risk tolerances vary widely among clients.

The algorithm is designed to fairly compare the business practices of a large group of Financial Advisors based on quantitative and qualitative elements. Data are weighted to ensure priorities are given to dynamics such as preferred “best practices”, business models, recent business activity, etc. Each variable is graded and represents a certain value for each measured component. Mathematically, each Advisor is indexed against his or her peers in each category. These scores are fed into our algorithm and a final score is produced.

Specialized Rankings

Below are criteria for two specialized rankings:

Forbes “Up & Comers” Millennials
We believe this ranking is the future of our top advisor rankings in five or more years. These are the industry’s rising stars. There are two types of advisors we are seeking: 1) Those that are building their own books of business; and 2) advisors who may not be showing their own numbers, but are on track to become a senior leader on a team, currently in the role of investment analyst, relationship manager, planner, or other key role. These advisors must have 4 years of total relevant experience. SHOOK performs its typical due diligence for these candidates.

Working Mother Cover Story
As our industry moves away from a focus on investing to one that involves family dynamics, we believe women are the future of this business. Women tend to be more empathetic, compassionate–and, let’s face it, better listeners! Of course we have a Forbes Women’s ranking, but we thought it important to create one exclusively for Mothers. While women in general have faced an uphill battle in this (and other) industry, Mothers face far more challenges. And, again, let’s face it–who doesn’t love at least one mother? Our typical criteria applies, but here are more particulars: Mothers with a minimum of 5 years experience as an advisor must have at least one child living at home who is under 18.

**SHOOK DISCLOSURES**

SHOOK is completely independent and objective and does not receive compensation from the Advisors, Firms, the media, or any other source in exchange for placement on a ranking. SHOOK is funded through conferences, publications and research partners. Since every investor has unique needs, investors must carefully choose the right Advisor for their situation. SHOOK’s research and rankings provide opinions for how to choose the right Financial Advisor. Portfolio performance is not a criteria due to varying client objectives and lack of audited data.