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States With the Highest AUM Potential Per Advisor

Recent industry research based on household net worth data shows certain states have higher AUM potential than others.

Photo of people riding horses on a ranch
Photo by JSB Co. via Unsplash

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While New York City is largely considered the financial capital of the world, some sparsely populated places — beachy Hawaii, snowy Maine, and mountainous Montana — may have more potential for advisors to find new assets. 

According to a recent SmartAsset report, unique state characteristics can create opportunities for niche advisors. The data highlighted regions with growth potential that might fly under the radar for even the most plugged-in advisors. Despite having a population of just 1.1 million, Montana, for example, ranked sixth on the list because clients tend to require more estate planning services amid generational ranch sales, said Bozeman-based Eric Flynn, head of wealth management at Compound Planning.

“There’s an aging rancher population,” Flynn said, “so there’s a lot of generational wealth being created.”

Rich-Back Mountain

States often have specific areas where financial planning services are needed most, and the data found opportunities for advisors that may still be “left on the table,” said study author Jaclyn DeJohn. “If everyone thinks, ‘Oh, New York is where the money is, that’s where I should set up my RIA and practice…’ The potential AUM starts vanishing pretty quickly,” she said. The Treasure State also has what Flynn calls the “Yellowstone phenomenon” — based on the Western drama starring Kevin Costner — which influenced people to buy ranch land and second or third homes in the mountains. The three highest-ranking states in the report are:

  • Hawaii, which had the most consumer AUM per advisor at $917 million per advisor and 140 active advisors as of June;
  • Maine, which had the second-highest AUM per advisor at $501 million per advisor and 162 active advisors;
  • And New Mexico, which had the third-highest AUM per advisor at about $200 million per advisor and 179 active advisors.

One reason for Hawaii’s and Maine’s dominance may come from their remote geographic locations, DeJohn added, hence their low advisor counts, with both states also attracting wealthy vacationers.

Tech Stack. Washington, which ranked fifth, benefits from its large proportion of high-salaried tech workers, with roughly 1 in 10 residents employed in the sector. A lot of this wealth comes in the form of company equity, said Eric Franklin, co-founder of Prospero Wealth, which caters to tech clients. “Amazon, Microsoft, Meta, Google, Apple — these are companies that have had very, very healthy stock prices for a very long time, and so… there’s a significant amount of taxation involved with accessing that accrued equity,” he said. “There’s a lot of tools in that concentrated equity space that present big opportunities for advisors who become experts in helping clients navigate that area.”

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