When Debra Wetherby started her investment advisory firm in1990, she was 32, just married and had less than $50,000 ofcapital.

She plunged into an emerging industry of advisers who run theirown businesses rather than operating inside big brokerages such asMorgan Stanley, which she’d left in 1988. With 10 clients bettingon her, working without a salary and living on credit cards, sherented an office on San Francisco’s Sansome Street and gave herselfa deadline: make money in three years.

Today, Wetherby Asset Management leases the entire eighth floorof a financial-district high-rise adorned with toga-wearing femalestatues dubbed the corporate goddesses.

From this perch and another office in Manhattan, the firm servesabout 500 families who generally have at least $10 million toinvest. That added up to $3.5 billion in 2013, lifting Wetherby’sfirm to No. 1 in Bloomberg Markets’ first ranking of independentregistered investment advisers, or RIAs, based on the assets theymanage.

Few people knew the term RIA when Wetherby started. Now, thefield is on a tear.

“In hindsight, it looks very prescient,” Wetherby, 56, who’s thechief executive officer, says. “It really was more about servingclients a certain way.”

‘Growth Cycle’

RIAs are required to put customers’ interests first and usuallyearn a fee on assets under management. Brokers, who often callthemselves advisers, only have to recommend investments that aresuitable and can make commissions from products their firm sells.Some financial professionals register as advisers and brokers.

The Dodd-Frank financial overhaul spotlighted the differences atthe same time a wave of baby boomers were seeking help making theirmoney last.

“It’s been a continuous growth cycle for RIAsover the past seven years because of the complexity of markets andchanging needs of clients,” says Bernie Clark, head of adviserservices at Charles Schwab Corp. Schwab holds more than $1 trillionin assets for about 7,000 independent RIAs, which amassed $60billion in new money in 2013.

The Bloomberg Markets ranking -- to be published in the Januaryissue -- includes RIAs registered with the U.S. Securities andExchange Commission that reported that more than 75 percent oftheir clients have high net worth, meaning they have $2 million innet worth or $1 million with the adviser. Bloomberg excludedthose who take commissions or are affiliated with a bank, insureror other financial firm.

Rising Share

The more than 20,000 independent RIAs in the U.S. have gainedmarket share among wealth managers every year since 2007,increasing their assets 82 percent to $2.3 trillion from 2007 to2013, Boston-based research firm Aite Group LLC says. In contrast,client assets at the largest retail brokerages rose 8.2 percent to$6.2 trillion in the same period.

“The RIA field appeals to both the best and the worst instinctsof financial professionals,” says Barbara Roper, director ofinvestor protection at the Consumer Federation of America.

She says the RIA model reduces conflicts of interest, thoughthese advisers can have less federal oversight and fewer licensingrequirements. Some, such as Wetherby, are certified financialplanners and analysts.

New England Private Wealth Advisors LLC grew the fastest amongthe top 50. The firm, based in Wellesley, Massachusetts, boostedassets 44.8 percent to $794 million in the year ended on Dec. 31,2013. CEO Ira Rapaport, 51, says the firm serves about 200customers who generally have at least $2 million to invest.

Treadmill Desk

Wetherby’s largest family, whom she declines to identify, hasabout $400 million invested. Annual fees start at 75 basis points.They drop to 15 basis points if the assets managed exceed $80million. (A basis point is 0.01 percentage point.)

Wetherby, who got her MBA from the University of California atBerkeley, won’t discuss returns. She says the firm tailorsinvestments to clients, so there are no averages.

Wetherby puts in 10-hour-plus days and leads by consensus. Eachof her 56 employees had a vote on the design of their 8th floorworkspace, which they moved into this year, she says. They wantedequal-sized offices around the perimeter and low-rise cubicles inthe middle so people could easily interact. In line with thehigh-tech focus of San Francisco, she chose a desk with an attachedtreadmill to exercise while reading or listening to conferencecalls.

Most days, she’ll review trades and meet with at least onefamily on investments or tax planning. For major decisions, sheassembles an eight-person committee that includes herself and sevensenior employees.

Original Client

She called a meeting on Oct. 15, when the Dow Jones IndustrialAverage tumbled and the yield on 10-year U.S. Treasuries droppedbelow 2 percent. That day, the firm had planned to reinvest moneypulled from the Pimco Total Return Fund after Bill Gross, managerof the bond fund, left Pacific Investment Management Co. inSeptember for Janus Capital Group Inc. Instead, it waited untilmarkets calmed.

Saul Feldman is one of Wetherby’s originalclients. He met her at Morgan Stanley in the 1980s, when he was anexecutive at General Parametrics Corp. and the bank helped take thetechnology company public.

Feldman, 84, became CEO of HealthAmerica Corp. of California andlater United Behavioral Health. He says he appreciates Wetherby’ssteady hand. She’s guided his family through financial ups anddowns -- and preserved their capital.

Now, Wetherby is helping to transfer Feldman’s wealth to hissons and grandchildren. She says her firm’s advice revolves aroundsuch goals.

“It’s not about the money,” she says. “It’s about what you wantmoney to do for you in your life.”

How Bloomberg Crunched the Numbers

Bloomberg Markets ranked active U.S. registered investmentadvisers that provide financial planning services based on the datathey reported to the Securities and Exchange Commission as of June2, 2014. It used filings as of June 3, 2013, for year-over-yearcomparisons.

The ranking excludes firms that operate as or are affiliatedwith broker-dealers, banks or thrifts, trust or insurance companiesor firms with employees who are registered representatives ofbroker-dealers. We also excluded firms that take commissions, sellfinancial products or operate as real estate agents, lawyers,insurance brokers or accountants. It did not consider multifamilyoffices.

The RIAs on its ranking obtained more than 75percent of their assets under management from high-net-worthindividuals. They got up to 25 percent of those assets from any ofthe following sources: investment and business developmentcompanies, pooled investment vehicles, pension and profit-sharingplans, charitable organizations, corporations or other businesses,state or municipal government entities, other investment advisersor investors that the RIAs described in their filings as“other.”

--With assistance from Maryann Busso and Judith Sjo-Gaber inNew York.

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