Summit Financial, the New Jersey-based RIA backed by Merchant Investment Management, has taken a minority, non-controlling stake in Signet Financial Management, a Parsippany, N.J.-based registered investment advisor with $1.2 billion in client assets. Signet has also been backed by Merchant since 2021.
The deal is part of the RIA’s Summit Growth Partners initiative. In the transaction, Signet will retain its leadership and core teams.
Signet was founded in 1988, and is now led by principals Eugene Yashin, Steve Tuttle and Shawn Hirsch. In addition to the New Jersey office, it also has offices in Virginia and Florida.
“They built a $1 billion-plus firm and now having access to what Summit has as far as resources and people, capital, technology, we hope we can help them build that billion-dollar-plus firm into five and 10 and $20 billion over the coming years,” said Stan Gregor, chairman and chief executive at Summit.
Yashin said his firm was primarily investment management-focused, with strong equity and fixed income capabilities, but clients have been demanding more capabilities.
“At some point, while growing and enjoying the relationships with our clients, we realized that the competition is changing,” he said. “The whole industry is changing. The marketplace becomes much more concentrated, much more versatile. Clients are not happy with making them 14% a year anymore. They may demand more complex solutions, more nuanced financial planning.”
He expects Signet advisors to use Summit’s deeper estate planning capabilities, tax optimization and alternative investments, which clients can access at a lower cost due to Summit’s negotiation power.
While Signet already had relationships with Schwab and Goldman Sachs for custody, this partnership allows them to have a relationship with Fidelity as well.
Summit will have the opportunity to incorporate Signet-developed tools into its technology platform, including Holistico, an artificial intelligence tool for investment research and portfolio workflows. The technology is currently used by 230 advisors, and Summit expects to roll it out to a broader pool of advisors.
This is not the first Merchant-backed RIA that Summit has partnered with, and Gregor said this will not be the last. In 2024, Summit took a significant stake in the wealth management arm of Meeder Investment Management, alongside Merchant.
Summit has been minority-backed by Merchant Investment Management since 2019. Last year, the firm disclosed in its Form ADV that Merchant now owns a controlling stake in the firm.
Since 2020, the firm has grown its assets under management six-fold to $26 billion, and Gregor expects the firm will surpass $30 billion in the next month or so. Sixty percent of Summit’s growth since 2020 has been through M&A, with the remaining 40% organic. It now has more than 525 professionals across the organization, including about 175 client-facing advisors.