Investments, while important, are usually just one piece of the puzzle when it comes to mapping out a financial plan for clients, says James W. Rockwell, a financial principal at the firm.
"It really runs the gamut," he says. "On one end you have clients who we are paying bills for. On the other end of the spectrum, you have clients who like our investment style and like having their assets held in a single place."
Most of the firm's clients are either entrepreneurs who have sold, or are planning to sell, their businesses, or current and former company CEOs, according to the firm's principals.
Before the end of the bull market, Rockwell says the firm saw a steady influx of clients whose fortunes were derived from building up businesses and reaping the rewards through a profitable IPO.
Clients pay on a sliding scale, with a 1% fee on the first $10 million in assets, 0.60% on the next $15 million and 0.50% on everything above $25 million.
Principals are required to invest in the same portfolios as clients. Also, two years ago, compensation for the principals changed from an ownership interest to an incentive-based program tied to the firm's earnings, investment performance, client retention and asset gathering. "Our compensation program is really tied to the success of the firm," Hull says.
Steiner feels the firm's steady and incremental development of its asset management operation was responsible for the firm's overall growth. Starting out with a basic growth approach, with investments primarily centered on individual large-cap stocks, the firm started to diversify its strategies.
It did so by finding portfolio managers with expertise in specific strategies the firm wanted to pursue. Among the first of these hires was Steiner himself, who joined the firm in 1998 to revitalize its small-cap portfolio.
One of the major changes Steiner made was to move the portfolio from a regional to national a approach. "Six years ago, the small-cap equity was a regional product," he says. "We owned ten companies, most of whom I could see by looking out my office window."
More changes followed. Jeff Erickson, who ran international mutual funds at Advantas Capital Management, was hired to run the firm's international portfolio. In an effort to hedge the firm's risk against the dollar, he developed a portfolio in which 80% of company earnings were in nondollar denominations. To run a real estate portfolio, the firm brought in Brian Donahue, a manager with experience in both private and public REITs, Steiner says. "We've hired carefully selected portfolio managers to fit specific strategies," Steiner says.