Firm: Blue Chip Partners
Name: Robert Steinberg
Location: Farmington Hills, MI
Team Custodied Assets: $1.3 billion
Forbes Rankings: America’s Top RIA Firms
Background: Steinberg graduated from Michigan State University in 1984 with a degree in accounting and began his career specializing in tax preparation and planning at Deloitte. He went back to law school at the University of Michigan and then worked for a couple years as an estate-planning attorney for Honigman, Detroit’s largest law firm. In 1993, he started as an advisor with many of his early clients being former colleagues from the law firm. Steinberg eventually started Blue Chip Partners in 2004 and brought on his longtime partner, Daniel Seder, a year later. Today the firm has 33 employees servicing roughly 800 clients.
Building Relationships: Blue Chip Partners has positioned itself to do the whole range of planning for clients—from investments to taxes to estate planning—all under one roof, with different subsidiaries of the business to help specialize in each segment. The firm also focuses on educating clients through a very active social media presence and even has its own podcast.
Competitive Edge: Steinberg says excellent employee hiring and retention as a pillar of the firm’s success. Prospective hires all take the Caliper Profile assessment, a rigorous personality test designed to predict future job performance. This not only allows the team to hire from outside the business, but also to find ‘team players’ such as former college athletes, for instance, who understand the importance of working together or not winning every game of a match, says Steinberg.
Investment Philosophy/Strategy: Blue Chip uses an independent investment department of which the primary equity portfolio strategy is dividend growth. Instead of an ETF- or mutual fund-heavy model, the team’s core approach to equities is investing in companies that have a track record of paying and growing dividends. “Every time a company raises their dividend we will send clients an email… because clients own individual stocks in their portfolio they have higher risk tolerance,” says Steinberg. “These companies have a track record, so in down markets clients are still getting positive emails that they raised their dividend and that helps their confidence.” In terms of asset allocation, Blue Chip generally favors a 70/30 allocation of equities with the rest a mix cash and fixed income. “We tend to be more plain vanilla on fixed income, with some ETFs and lower cost mutual funds,” says Steinberg. “Trying to get too smart with bonds just doesn’t work—that portion of a client’s portfolio should be defensive.” When it comes to alternatives, the firm has very limited exposure: “We have chosen to keep things simple from a client standpoint.”
Investment Outlook: “Unless one party sweeps the election and gets rid of the filibuster, we’re unlikely to see dramatic changes that will have an effect on the market,” says Steinberg. He and his team remain optimistic about the direction of the economy as inflation is likely to continue to moderate, though they don’t anticipate interest rates to come down too quickly. “Personally, I was surprised they did 50 basis points,” says Steinberg. “I thought with the presidential election they would maybe be a bit more conservative.”
Best Advice: “You’re going to have snow storms, but snow melts and things will continue to do well,” Steinberg often tells clients. He recalls early in his career, he once called up a client to congratulate him for his portfolio losing less than the market during a downturn: “He told me, ‘Never tell a client they’re doing well when they are losing money.’”
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