Amelia Garland / 07 December 2018, 11:33
Hopping off the plane, I headed straight to my first meeting of the day in Long Beach, where I was meeting Brian Spinelli at Halbert Hargrove Global Advisors (below).
The firm started out as a brokerage in 1933, initially handling money for the founders, who had made their fortunes in the oil business in Long Beach. It continued as a brokerage until the mid-1980s, when chairman and chief executive Russ Hill changed the model to purely fee-based, making it one of the first RIAs in the country. Today, the firm has $2.6 billion in assets under advisement, with more than 600 families.
Spinelli and Hill are based in Long Beach, but the firm is spread across the western states, with a total of seven offices. As chair of the investment committee, Spinelli is responsible for advising individuals and institutions on their investment and wealth advisory needs. He takes part in what he calls a unique ‘discovery process’ for new clients, making sure that the families are a good fit for the long term.
‘It has been quite beneficial to know where a potential client stands today and where they want to go,’ Spinelli said. ‘It helps us to gain a deep understanding of their current situation and the expectations they have for the advisor they are hiring.’
The firm partners with 10 managers to build its client portfolios and constructs portfolios based on clients’ short- and long-term needs, with a focus on how much risk the client will tolerate. There are about eight guideline portfolio models, but the team can deviate from these based on specific client goals and their tax situations.
‘At the moment, we are underweight core investment grade fixed income relative to a traditional 60/40 portfolio mix,’ Spinelli said. ‘Most of those assets have been deployed into alternatives, which we expect to provide upside over the coming years.’
This year, the firm has added private real estate to its portfolios. Spinelli said that he expected to continue building this position over time, allocating from public real estate investment trusts or core fixed income.
Interval funds are another way that the team has been delivering illiquid assets to clients at lower minimums than private placements. ‘It allows us to layer these into portfolios, provide daily pricing and overcome a lot of operational burdens of using private placements,’ Spinelli explained.
Next I headed to my favorite street in LA, the Avenue of the Stars! Feeling right at home with the line-up of luxury cars and celebrities, I strutted to my last meeting of the day with Sam Miller and Jason Hart at Signature Estate & Investment Advisors (SEIA).
Alongside the RIA business, SEIA owns and operates Signature Investment Advisors (SIA), an investment platform launched in 2011. It was previously available exclusively to the Signator network of financial advisors, but in June, Advisor Group acquired Signator Investors and rolled Signator into Royal Alliance, one of four firms within its network of 5,000 financial advisors. Together, SEIA and SIA manage a combined total of $9 billion in assets.
Miller (above, right) is a senior investment strategist at the firm, and Hart (above, left) is an operations manager. Miller is also one of the nine members of the investment management department, led by chief investment officer Deron McCoy. The team offers both discretionary and non-discretionary investment solutions.
‘We recognize the importance of tailoring portfolios to the unique specifications of each client, allowing for customization around risk/return targets, vehicle preferences (ETFs versus individual stocks and bonds) and different investment styles,’ Miller explained. ‘Those styles include smart beta, equity income and passive or active, although many clients opt for a blended approach.’
The majority of the firm’s discretionary assets are invested in a shortlist of between 20 and 25 ‘best-of-breed’ investment managers. To identify those managers, the firm uses a proprietary quantitative due diligence process for filtering, screening and scoring the universe of funds.
Looking ahead to next year, the team has a few priorities. ‘First, we recently launched an ESG strategy over the summer, so we are spending a lot of time educating advisors and clients about the merits of pairing their personal values with their portfolio,’ Miller said.
In addition to ESG, the team continues to look for interesting opportunities to help clients navigate the later stages of the business cycle. This includes options-based strategies, interval funds and private alternative investments.
Waking up bright and early in my hotel in the heart of Beverly Hills, I headed to one more meeting before my flight, catching up with Drew Chan at First Foundation Advisors.
First Foundation is unique in the sense that the RIA created a bank to serve its clients’ evolving needs. This has allowed the RIA to maintain its independent culture, according to Chan. In total, the firm has $5 billion in assets on the banking side and $4.3 billion on the RIA side.
Chan (below) is a portfolio strategist and one of the 12 senior investment professionals at the firm. He is responsible for overseeing the investment platform and determining the asset allocation guidelines.
First Foundation uses third-party managers and internally managed solutions. It offers portfolios across seven risk profiles, and Chan said that he focuses on delivering alpha through both asset allocation and investment solution selection.
‘Like a tailor who measures each client multiple times, First Foundation creates bespoke investment portfolios for its clients after an in-depth financial balance sheet review, incorporating their personal risk tolerance, goals and objectives, income requirements, liquidity needs, time horizon, tax situation and personal views,’ Chan said.
For more information or questions, please contact Halbert Hargrove at firstname.lastname@example.org.