Greenwood Gearhart Inc. in Fayetteville is just getting started after surpassing $1 billion in assets under management this summer, said CEO Brock Gearhart.
Although the company has been around since 1982, when it was founded by investing pioneer Mary Ann Greenwood, breaking that $1 billion barrier propels Greenwood Gearhart into a new league — one that allows it to add services and provide those services more effectively and efficiently, said Gearhart, who joined the company in 2008.
The company’s ADV filing with the U.S. Securities & Exchange Commission in April reported that the financial adviser had slightly more than $877 million in assets under management (AUM) at the end of 2022. That represented a 4% increase from $844 million at the end of 2021.
Gearhart said the company’s goal was to clear $1 billion AUM, and it finally reached that mark in June. The 16-person firm represents clients in 34 states.
“That is definitely an industry milestone,” Gearhart said. “It has been something we have been working toward as a firm, namely because of what it allows us to do with our client relationships with the added services we can provide as we become a larger firm. We are proud to be able to accomplish it in the first half of this year after a challenging 2022.” He added, “It has been a fun journey.”
Gearhart said the company’s success has come through its focus on being a “multifamily office,” one that provides multiple services for wealthy families looking to address needs ranging from income growth to tax planning to philanthropy. The company offers all its services in-house, with selected third-party referrals and advice, allowing clients to find in Greenwood Gearhart a one-stop financial shop.
Gearhart said of the more than 16,000 registered investment adviser firms in the U.S., about 10% have more than $1 billion in AUM.
Greenwood Gearhart is at No. 9 on Arkansas Business’ list of the state’s largest money managers, based on assets under management declared by a company on its most recent ADV filing.
“To remain a top-tier firm for your clients you have to have an established sizable organization to continue to grow and layer on more and more services,” Gearhart said. “The industry is consolidated and it is factoring larger firms. The growth in the industry is coming disproportionately to those managing $1 billion plus.
“We want to be around 40 more years, so this allows us to grow off various established platforms and remain relevant in the industry.”
The one-stop model has been a growing trend in the wealth management industry, and Gearhart said the firm was fortunate to be ahead of the curve.
Gearhart said very wealthy people — for example, those with assets for $100 million or more — have their own teams of financial advisers and accountants. Those with assets in the $5 million to $10 million range don’t have their own personal wealth advisory team.
“What our firm has done is bring investments and financial planning and coordinated those with really good tax advisers and estate planning advisers and alternative investments,” said Gearhart, who is also a partner with Natural Capital and its $145 million investment fund. “Tying all those things together, we believe we start picking up nickels and dimes, and pretty soon you’re helping clients save real dollars and be in a really good situation versus if they were not coordinated.”
Company President Lisa Brown said the company realized that client needs were becoming more complex, and intertwined, so the all-in-one-place model was perfectly suited to handle the new dynamic.
“Our build-out to the model we have now has been in response to what our clients need and coordinating across their total financial picture,” Brown said. “It is certainly a challenge, but we are surrounded by great team members and great advisers in our community, and the growth has allowed us to invest in different resources for our clients so we can meet those needs.
“We have really strived to focus on building out what our clients need and maintaining our growth but also keeping the client at the center of all of it so they feel the service is steady and reliable every step of the way.”
It’s a group effort, too, which helps. Every adviser works for every client as needed
“What we try to do is identify their unique talents and match those to clients’ needs,” Brown said. “Every client gets the benefit of every single team member. We call it team-based wealth management. When you combine all those talents into one pool for a client versus one client having a person at a firm, you get better results for the client. It is better for the business as well.”
Mary Ann Greenwood retired from the firm in 2015 and died in September 2022 at the age of 82, but her presence still is felt in the company she founded.
Brown first went to work for Greenwood at Greenwood Gearhart as a college intern 20 years ago and later rejoined the firm in 2016; she was named president in 2022. She said Mary Ann Greenwood’s abiding tenets are still followed.
“She definitely taught me the core principles of how to conduct yourself in business, how to treat clients well and how to serve your community,” Brown said. “Her legacy is really spread across the firm.”
Gearhart said Mary Ann Greenwood was ahead of her time in the financial world. Brown said the company has more female advisers than male, a lasting effect of Greenwood’s pioneering ways.
“We are fiduciaries 100% of the time, and the industry is moving in that direction,” he said. “We are a fee-only shop; we don’t sell products. She always insisted that our personal investments be invested alongside our clients’. That goes back to 1982; that’s not new. Those things are the bedrock of our company.
“As long as I’m here they will continue to endure as well.”