STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION
The insights you’ll discover from our published book will help you integrate a variety of wealth management tools with financial planning, providing guidance for your future security alongside complex financial strategies, so your human and financial capital will both flourish.
Clients frequently share with us how the knowledge gained from this book helped provide them tremendous clarity, shattering industry-pitched ideologies, while offering insight and direction in making such important financial decisions.
A poorly planned portfolio – even for ultra-high net worth investors – can lose 50% or more in a crisis like this one. We have seen it happen to numerous clients coming to us from other advisors, as you’ll see in a bit. It’s possible to lose all the gains from the last ten years of bull markets if you don’t respond properly to this crisis.
Table of Contents
- 1. Keeps a Steady Hand
- 2. Informed Experience from Prior Market Crashes
- 3. Has Data from Other Clients
- 4. You Won’t Be Alone
- 5. Knows How to Respond
- 6. Avoids Bad Decisions; Makes Good Decisions
- 7. Helps Capture Gains and Protect from Losses
- 8. Retain Confidence in Your Future
- 9. Keeps You Informed on What’s Happening with Your Money
- 10. Have a Plan and Be Able to Stick to It
Here are ten reasons an ultra-high net worth (UHNW) financial advisor can lessen the pain and increase your financial serenity even during a crisis as costly as this one.
1. Keeps a Steady Hand
As we have said many times, everyone is an expert investor when times are good. The real test for how well you’ve done at investment planning comes during a crisis like the one we’re in now. That’s when emotions you haven’t felt in years suddenly arise and try to convince you to make terrible financial decisions that are not in your best interests, short term or long term.
Emotions are the worst investment advisors on the planet. You must steer clear from letting them influence your decisions.
A good wealth manager will offer you a steady hand with which to lead you through this time and guide you to make smart decisions that preserve your long term financial prosperity and stability.
2. Informed Experience from Prior Market Crashes
Any ultra-high net worth financial advisor worth your time has been through something like this before. Yes, every crisis is different, but certain core principles remain true.
And the best wealth managers don’t just ride out the hard times. They learn from them.
Pillar Wealth Management’s principals have paid close attention to market performance for over 30 years, through one crisis after another. And in the service of our clients, because we are fiduciaries, we have developed a customizable investment planning process that continually adjusts every quarter to preserve your long term financial health.
We have learned from prior experiences and observations, and we have broadened our planning process to include historical performance data going back 100 years so it incorporates the data from many more crises than just the most recent ones.
Our clients are the beneficiaries of that informed experience. Our non-clients are left to fend for themselves.
Get Customized UHNW Investment Planning During COVID-19
3. Has Data from Other Clients
Wealth managers are not allowed to use specific client investment testimonials data as examples in articles such as this. However, we can look at our data and confirm that our process works.
For example, many of the biggest banks and brokerage firms use surprisingly similar approaches to investment planning for their clients. So many clients have come to us with portfolios broken up into cookie-cutter asset allocations like 70% stocks and 30% bonds, or 60%/40%.
One thing we can almost guarantee: If you had that sort of asset allocation when COVID-19 hit, you have lost too much money. Those asset allocations usually perform very badly when the market crashes. Almost every time. We do not say this theoretically. We have seen it. This is the experience referenced a moment ago.
We have seen – firsthand – how previous crises have decimated portfolios overly weighted with high-volatility equities.
One family that used to have $440 million came to us with just $70 million left. That’s an 82% loss! Another that used to have $8 million came to us with just $2 million left. 75% loss. Yet another couple that used to have $32 million came to us after the dotcom crash with just $5 million left. An 84% loss.
Can you imagine?
What looked like a completely secure life through retirement now feels tenuous and uncertain. Suddenly, you have to keep working longer than you had planned and hope nothing worse happens, like a family medical crisis.
It happens far more often that most high net worth investors are comfortable admitting.
4. You Won’t Be Alone
Watching your portfolio strain under the weight of a market crisis like COVID-19 can be painful, stressful, and fearful. It’s not something you want to do alone.
An experienced financial advisor with an innovative planning process and data to back it up offers you a trusted partner to talk with. Sometimes, you don’t need to do anything in response to a crisis. Sometimes, you just need someone who knows what he’s doing, and who has taken the fiduciary oath to put your interests before his own, to tell you it really will be okay.
And if it’s not okay, you want that advisor to tell you the truth and help you rework your plan until confidence is restored.
5. Knows How to Respond
Does your portfolio need any adjustments to maintain its long term health during the COVID-19 crisis? How can you tell? Should you change anything? What should you leave alone?
An experienced advisor with a proprietary, data-informed, customized, adaptable investment planning process can target specific adjustments to your portfolio that will restore it to proper health.
At Pillar Wealth Management we make adjustments like this every quarter, in good times and bad. During a crisis like this one, we can run simulations showing how well your portfolio will perform, and determine which adjustments, if any, need to be made.
Back to #1, this is how we remove emotion from our own process. We aren’t flying by the seat of our pants with your money. We are using a plan based on 100 years of historical data modeling and stress-testing, and we are following that plan. The plan guides us. Not our whims, emotions, or hairs on the back of our necks.
6. Avoids Bad Decisions; Makes Good Decisions
Now is the worst time to make bad investment decisions. In good times like most of the last ten years, if you chose the wrong equity fund or made a bad bet, you had time to pivot away from that and recover your losses.
In good times, poor choices can mean earning 8% instead of 12%. And to be clear – that is a huge difference, and we do not give poor performance a pass. Good times are the time to achieve your biggest gains while maintaining proper risk tolerance and long term stability. Good times are when you can seal your long term goals and dreams through the rest of your life.
But in bad times, making poor decisions can cost you far more dearly. Again, see the previous examples of real clients who came to us having lost over 75% of their wealth because of their previous advisors’ cookie-cutter approach to investing, even for their high net worth clients.
Losing 75% of your wealth in one year is far worse than earning 8% instead of 12%.
Now is the time you must make the best and wisest decisions for your future – based on objective data and a plan built to perform for the rest of your life. Now is the time to avoid decisions that might cost you so dearly you can never recover from them.
An experienced ultra-high net worth financial advisor helps you avoid bad decisions and make good ones during this critical time.
Have a High Net Worth Friend Who Needs to Read This?
Share this article with them on social media
7. Helps Capture Gains and Protect from Losses
The market has already crashed. It’s too late to avoid the first wave. But what happens next can make all the difference for the position you will find yourself in five years from now.
Eventually the market will grow again. But it may continue to rise and fall like a stormy tempest for the next several months, or perhaps years. An experienced wealth manager will be able to help you capture the gains that will come, while protect you from losses that may still be waiting for you.
Now is the time to seize this moment. Waiting even a few months could cause irreparable damage, and could lead to missing out on the optimized performance we strive to deliver for all our clients.
8. Retain Confidence in Your Future
The present is uncertain, but your future doesn’t have to be.
The power of historical data going back 100 years combined with an innovative stress-testing process allows Pillar Wealth Management to project your retirement income and lifestyle confidence for a lifetime.
We are able to see, within a range of confidence, how well you will perform for, say, the next 30 years. If our projections show your portfolio to have fallen out of what we call the Comfort Zone, we will advise you to make targeted adjustments now until your long term stability returns to the Zone.
Read that paragraph again – it is very important!
Our process works, even in an economic crisis like COVID-19.
For instance, for a portfolio that has fallen out of the Comfort Zone, we might advise a client to reduce their monthly spending for six months. We might recommend increasing their contributions to retirement accounts, or reducing the amount they plan to leave to their estate. Many other options are at our disposal.
But the point is – whatever adjustments get made, we can then project the new confidence level of your retirement future. That revised projection and restored Comfort Zone status is the performance you can be confident in.
What makes this approach such a relief for our clients is that we don’t only use it during times of crisis. We do this every quarter, for all our clients, all the time. You are continuously secure in the long term Comfort Zone. If you fall out, we adjust until you get back in.
You can’t find anything like this kind of long term confidence in a typical big bank or discount brokerage firm.
Find Your Customized Comfort Zone During COVID-19
9. Keeps You Informed on What’s Happening with Your Money
A fiduciary wealth manager keeps you informed. You will know the truth about your money. You will know what’s going well and what might need to change.
You will be safe from scams and will steer clear of panic. You will receive consistent reports. You will have personal access to your actual wealth manager – not a secretary, not a wet-behind-the-ears advisor who just graduated, and not just a computer.
10. Have a Plan and Be Able to Stick to It
What this is really about is simply having a plan you can stick to. An ultra-high net worth financial advisor worth your time should be able to articulate for you a customized plan that exceeds all your short and long term goals, all your lifestyle dreams and plans.
Even during a crisis, you should be able to look at your plan, see how well it’s holding up, talk with your wealth manager about it, and remain on track for what you set out to do.
We simply will not stand for our clients losing huge swaths of wealth just because a crisis hits.
Here’s an in-depth exploration into how our planning process compares to the typical advisor’s approach.