Plan and Profit: 3 Retirement Advisory Stocks Worth Your Investment

Stocks to buy

The global financial advisory market is expected to grow to $240 billion in 2027 at a compound annual growth rate of more than 3%. The industry growth is attributed to the rise in the number of high-net-worth individuals (HNWI) worldwide. That’s excellent news for retirement advisory stocks.

According to Capgemini’s 2023 World Wealth Report, the total financial wealth of HNWI people worldwide was $82.9 billion. While down from 2021, it’s still up 12% from 2019. Approximately 31% of the HNWI wealth is in North America. It’s safe to assume that a big chunk of the North American component is from those living in the U.S.

While wealth inequality is a severe issue, investors can lean into this reality by investing in businesses that financially service the affluent and near-affluent.

Sure, most of the “Too-Big-to-Fail” banks have large wealth management divisions. So, you could buy shares in JPMorgan & Chase (NYSE:JPM) to cover your bases. Or, you can look for niche businesses focused on providing financial advice.

Here are three I’d put on your watchlist of stocks worth considering for your portfolio.

Ameriprise Financial (AMP)

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If you can only buy one of the retirement advisory stocks, Ameriprise Financial (NYSE:AMP) would be my choice. The large-cap was spun out of American Express (NYSE:AXP) in October 2005.

In 2004, the fiscal year before the spinoff, Ameriprise had revenue of $7.25 billion, $794 million in net income and $410.2 billion in assets under management and administration (AUMA). In 2022, it had net revenue of $14.26 billion, $2.72 billion in net income and $1.18 trillion in AUMA.

You’ll notice that its net margin went from 11.0% in 2004 to 19.1% in 2023. So, its net margin grew by 74%, while its AUMA increased by 189%.

That’s a big reason its shares have appreciated by 856% over its 18-year history as an independent, publicly traded company. That compares to 237% for the S&P 500 and 224% for American Express.

If you owned AXP in 2005, I hope you kept the Ameriprise shares you got in the spinoff.

AssetMark Financial Holdings (AMK)

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AssetMark Financial Holdings (NYSE:AMK) represents mid-cap stocks, though the California-based financial advisory’s current market cap of $1.99 billion borders on small-cap territory.

The firm operates a wealth management platform for independent financial advisors in the U.S. It finished the second quarter with 9,323 financial advisors, 33% of which have more than $5 million in assets on the platform.

AssetMark went public in July 2019, selling 14.4 million shares at $22. The company received 50% of the $317 million in gross proceeds from the sale. The other 50% went to its controlling shareholder, Huatai International Investment Holdings.

Huatai remains its controlling shareholder with 68.8% of its shares. Huatai Securities, a subsidiary of the parent, acquired AssetMark in November 2016, paying $768 million for the financial advisory.

It’s worked out for them.

Huatai received approximately $146 million from the AssetMark IPO. Its remaining 50.9 million shares are worth $1.36 billion. In seven years it has doubled its money, with more gains to come.

Its platform assets went over $100 billion during the second quarter for the first time. Buy AMK stock to ride it to $200 billion and beyond.

Virtus Investment Partners (VRTS)

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If you’re looking for a good dividend stock, consider Virtus Investment Partners (NASDAQ:VRTS), a Hartford-based provider of investment management services.

Virtus Investment Partners is unique in that it has brought together a group of affiliated investment managers with different investment styles. For example, it owns Stone Harbor Investment Partners, a New York-based firm specializing in emerging markets debt. It acquired Stone Harbor in January 2022 for $30.1 million. In 2021, it paid nearly $169 million for Westchester Capital Management, specializing in event-driven equity strategies.

Virtus stock has had its ups and downs since going public 15 years ago. However, despite the fall from 2021 highs above $330, Phoenix shareholders who kept their shares are up more than 1,850%.

n August 17, Virtus announced a 15% increase in its quarterly dividend to $1.90. The annual rate of $7.60 yields a healthy 3.7%.

Get paid to wait for VRTS to go on another run like the one in 2020 and 2021.

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.

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