Signature now has 12 family office clients and about 140 other clients with a total of $2 billion in assets under management. A staff of 29 includes nine financial planners, three analysts and five attorneys.
"The office infrastructure and the depth of thinking required translate well across clients of all sizes," Webb says.
"The relationship managers work only with wealthy individuals or with family office clients, not both, and that is by design," Shumadine adds. "But they all share their knowledge. The substance is the same."
For instance, managing investments for tax efficiency adds value over and above investment returns for both groups, particularly in years when traditional markets are struggling. Philanthropic strategies may be used to accomplish the creation of a legacy, as well as tax efficiency for income and transfer tax purposes. In cases where either type of client holds illiquid assets, or has concentrated positions in liquid assets, those assets must be understood and included in the overall strategy.
Signature fees are negotiated based on a variety of criteria designed to show there are no conflicts of interest for the advisors, Colpitts says. Most family office clients are charged a flat fee based on the complexity of the work required and the assets being managed, with fees averaging $100,000 a year and up. For others, fees range from 67 or 68 basis points to 40 or 50 basis points as assets increase.
The firm does little marketing and adds fewer than a dozen clients a year. The courtship period for taking on a new client is lengthy and thorough, according to the founders.
Signature does not invest funds but instead designs asset allocations and selects money managers. Investments cover a wide range of allocations, including commodities, private equity, long-only traditional equity and hedge funds. Those same investments can be useful to both groups of clients.
The difference in handling affairs is how much of a "hands-on" approach Signature provides, according to Colpitts.
"For a family office, we will find the best aviation deal or advice on particular health care services," Colpitts says. "For the high-net-worth client, we will use this same knowledge to tell them where to find what they need. But the knowledge we need is the same."