By following a project manager approach, we aim to solve and help implement all your financial initiatives, responding to your changing priorities and market conditions. We can assist with the paperwork, analysis, decision-making and communication associated with the management of a clients' financial enterprises. We utilize both experienced in-house specialists and an established network of external professional service providers to provide you with more than just investment opportunities.
TO PRIVATE CLIENT WEALTH MANAGEMENT
Most investors, but especially wealthy individuals, like upside volatility, but abhor losses, regardless of how their investments performed against an abstract benchmark. Perhaps more so than others, wealthy individuals also wish to maintain their lifestyle and meet their financial obligations in times of extreme market volatility, like the 2008 financial crisis. Simply speaking, investors who could not withstand drawdowns during the 2008 financial crisis for either financial or psychological reasons had a financial strategy that failed.
Modern Portfolio Theory (MPT) fundamentally asserts that combining uncorrelated asset classes creates a portfolio superior to one concentrated in the "best performing" asset classes.
The problem is that wealth is mostly created through inherently risky, undiversified strategies with a high chance (and incidence) of failure.
This paradox leads to the question: What theory allows for wealth generation over and above a reasonable risk-adjusted return on a diversified portfolio of assets?
At Signature we rather subscribe to the Wealth Allocation Framework (WAF), which dictates various risk pools and return profiles per client, dependable on the objective of the specific asset and/or investment. Modern Portfolio Theory (MPT), in contrast to our approach, "pigeon hole" investors according to "personal risk profile".
This goals-based approach to wealth management is first and foremost conceptually intuitive. It encompasses an approach to risk budgeting and asset allocation that integrates personal perceptions of risk and a spectrum of investment goals that wouldn't be achievable strictly through mean-variance optimization investing.