How to Find a Good Wealth Manager: Questions to Ask

Wealth managers are individuals or groups that provide a combination of financial advisory and investment management services. They work with their clients to ascertain their life goals and manage their wealth to make sure they’re financially ready to achieve those goals. Knowinghow to find a good wealth manager can be especially important for high net worth and ultra-high net worth individuals with more than $10 million in liquid assets. The size of their wealth means that they require special attention to protect, manage, and grow it. If you want to learn more about this topic, you can check out our simple guide onhow individuals with more than $10 million in liquid assets can preserve their assets.

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The best wealth managers usually only service a certain caliber of clients. For example, Pillar Wealth Management exclusively services individuals with $5 million to $500 million in liquid assets. We only take on a specific number of clients to ensure that we give special attention and focus on each one. If you’re interested to learn more about how we can help grow your wealth, contact us for a free consultation.

In this blog, we will be discussing questions you should be asking prospective wealth managers so that you can choose the best one for yourself.

Table of Contents
The Secret on How to Find a Good Wealth Manager 2. How Will You Invest Towards My Goals? Is It Worth Using a Wealth Manager?

The Secret on How to Find a Good Wealth Manager

If you want to learn how to find a good wealth manager, you need to learn how to ask the right questions. By asking the following questions from a wealth manager, you’ll be able to get the right information and find out whether the wealth manager is suitable to handle your case.

1. What Are Your Costs?

Notice that we use the term “costs” instead of “fees.” Any wealth manager that tells you fees and costs are the same things is either unaware of the difference themselves or doesn’t have the best intentions. Usually, it’s not deception – just a lack of knowledge and experience on account of advisors who haven’t been informed about these things.

Anyway, if you are wondering, “what should I ask a wealth manager?” then we recommend starting by asking investors, “What are your costs?” At this point, don’t ask about what fees they charge. This question unknowingly will put you in a trap, where the answer you get will almost always be incomplete.

Almost every advisor and wealth manager will charge a fee. This fee is usually a percentage (typically 1%) of your assets and is charged on a per-year basis. However, fees are just one of the many costs involved in wealth management.

Asking about the costs will communicate your point clearly to the advisor and compel them to find a comprehensive answer to your question. For ultra-high net worth individuals with more than $25 million in liquid assets, every dollar and cent saved can add up to savings of thousands of dollars! If you’re an individual who falls into this category, you may want to consider checking out our hardcover book on The Art of Protecting Ultra-High Net Worth Portfolios and Estates – Strategies For Families Worth $25 Million To $500 Million.

Now, let’s explore some of the costs you might have to pay for – knowingly or unknowingly.

Capital Gains Taxes

No one can get away from the fact that they have to pay taxes on their capital gains. However, there can be a massive difference in how much you have to pay based on the kind of investment activities your wealth manager conducts on your behalf.

The long-term capital gains tax currently stands at 20%. The key term here is “long-term,” since this tax is applied to capital gains from investments that have been untouched for over a year. However, a 37% income tax is applied to short-term capital gains where your money is moved around by your wealth manager within a year in an attempt to time the market.

This means you’re paying 85% more taxes if your manager is trying to time the market. Capital gains tax is a cost, and everyone has to pay them.

We’re not saying that we will completely eliminate the capital gains cost at Pillar Wealth Management – that’s impossible. We’re only saying that we will do our utmost to always minimize it as much as possible. We aim to always save as much of your money as we can.

Commissions and Bond Sale Spreads

Some money managers will charge either or both of these two costs in addition to or instead of the management fee.

The bond sale spread refers to the difference between the selling price and the buy price. If your bond manager sells bonds, they may take a percentage of that spread as their payment. Some individuals believe their brokers charge “zero fees.” This is definitely misleading because no one works for free. Brokers charging zero fees are usually making their money on a spread. Though this might not be a big deal for smaller trade accounts, it can add up to millions for high net worth and ultra-high net worth individuals.

Commissions are sometimes charged on specific products like wrap programs, annuities, and so on. These packages are based on a set formula that doesn’t often consider your life goals and circumstances. If a broker earns commissions for selling these formulas, there may be a conflict of interest present.

Pillar Wealth Management is a fee-only wealth management firm that does not charge any extra commissions or make money on spreads. We inform you of all costs you will have to incur and will always try to minimize them. If you want to learn more about your investment costs, schedule a free consultation with us today.

Other Costs and Fees

There are a whole bunch of other costs that an investment broker or money manager might charge you with. This can include margin interest costs (potential conflict of interest), internal expenses, and so on.

We aren’t saying that you shouldn’t be charged some of these costs. The point is that you need to be made aware of all of them, and your wealth manager should try their absolute best to minimize them as much as possible. Quite often, advisors are unaware of the costs you might incur because of a potential lack of knowledge or experience.

Want to find out more about why fees and costs are different? Check out our ultimate guide to choosing financial advisors.

2. How Will You Invest Towards My Goals?

If you want the answer to “How do I find a good investment manager?”, this question will help you separate the best from the rest.

Meeting your life goals is likely the most important thing for you right now. You’ve worked all your life tirelessly to accumulate the wealth you currently have. Your priorities aren’t about earning an arbitrary return percentage every year. It’s about living the life you deserve and want without having to worry about losing your money. This question is a vital part of how to find a good wealth manager. It will help you gauge which advisors will actually work for your interests.

Many big firms have massive caseload. Wealth managers and advisors in these firms are dealing with a large number of clients at the same time. This can lead to a situation where they’re unable to create a custom plan for you (even if they want to). They will eventually be forced to funnel your money into the same investments as their other clients. Many firms may already have a few pre-designed investment plans that they fit you into. Though these plans sometimes work for the average investor, they don’t account for the special needs your wealth demands since the risk associated with them is too high.

AtPillar Wealth Management, we only work with a few exclusive clients that have $5 million to $500 million in liquid assets. Wealwaysmake sure we give our full attention to figuring out your life goals and setting up your investments to achieve said goals. Plus, we also have a process of making sure we invest in your goals without emotion.

How We Invest

Our experts will use their combined experience of 60+ years and have a deep discussion with you about your current situation and future life goals. Then, we will study your current assets and financial position to figure out the perfect way forward. We aim to always set your investments up in the best way to allow you to live the life we want.

We don’t like taking any extra risks. We realize that protecting the wealth of individuals with $5 million to $500 million in liquid assets and reducing their costs can often be just as important as earning a return. This is the kind of shift in paradigm that maximizes portfolio performance. You can learn more about these essential paradigm shifts in our easy guide.

When it comes to tracking performance, we don’t just leave it up to chance. Pillar Wealth Management usesEfficient Frontier and 1000 Scenario Portfolio Stress tests to make sure your investments are always on track to meet and exceed your goals. We run your investment portfolio through a thousand different scenarios, which include the worst cases, like multiple recessions, wars, and more. We make sure that your portfolio remains in the 75% to 90% confidence level, where it EXCEEDS your goals in at least 75% to 90% of scenarios.

We also make sure that we are never bound by industry norms. We will never assume that just because something worked before, it will work again. Experienced wealth managers know that it is almost impossible to consistently time the market.

3. How Will You Reduce My Risk?

Risk is an ever-present part of investments. You can never completely eliminate risk. However, that does not mean that you can’t minimize your risks and protect your wealth against most scenarios.

Diversification isn’t enough to get the best investment balance that minimizes risk. You need asset allocation in cash, bonds, and equities in the optimal ratio. Asking how well your wealth managers balance your investments is vital in knowinghow to find a good wealth manager – especially for high net worth investors. If you’re an individual with more than $10 million in liquid assets, you can check out our special guide for more information on asset allocation and investment balancing.

Your wealth manager should use processes like the 1000 Scenario Stress Test at Pillar Wealth Management to make sure your portfolio can meet or exceed your goals in most circumstances. Using these processes, your wealth manager should be able to provide you with financial serenity. If you’re an investor with $5 million to $500 million in liquid assets looking for financial serenity, schedule a free chat with us to find out how we can help.

4. Do You Offer Fiduciary Services?

You might finally be asking yourself, “Who are the best wealth managers?” Simply put, the best wealth managers must be fiduciaries that only act in your best interests.

A true fiduciary is an advisor that does not earn any commissions or product-based compensations by recommending any specific investment products to you. If an advisor does such a thing, it is considered a potential conflict of interest since they will be more inclined to make you invest in those products.

Though non-fiduciary advisors also want the best for their clients, they also have to deal with other vested interests. This includes the interests of their employer and their own interests. Their hands are sometimes tied with regards to the decisions they have to make.

A fiduciary advisor is usually an RIA that is certified by the SEC. The SEC makes sure these registered fiduciaries only act in their client’s best interests without involving any emotions. The experts at Pillar Wealth Management are RIAs with more than 60 years of combined experience in dealing with clients of high net worth and ultra-high net worth. We ensure that all of our decisions are based on data and the knowledge from our experience. If any rare cases of conflicts of interest occur, we always offer full disclosure.

We always only have two things on our mind: reducing your costs and optimizing your portfolio performance to meet your life goals. Want to learn more about how we optimize portfolio performance? Check out our guide.

Is It Worth Using a Wealth Manager?

A fiduciary wealth advisor with the right experience, knowledge, and work processes can provide exquisite value to high net worth and ultra-high net worth investors. Not only will they protect your wealth against losses, but they will also help it grow at a rate that helps you live the lifestyle you want. Using the tips in this article on how to find a good wealth manager, you can discover the best wealth manager for your interests.

If you opt for Pillar Wealth Management, we will put our maximum efforts into providing fiduciary services aimed at achievingyourlife goals and protect your assets.If you’re a high net worth or ultra-high net worth individual with $5 million to $500 million in liquid assets, visit the Pillar Wealth Management website to book a free consultation today.

Authors

Hutch Ashoo

Chris Snyder

To be 100% transparent, we published this page to help filter through the mass influx of prospects, who come to us through our website and referrals, to gain only a handful of the right types of new clients who wish to engage us.

We enjoy working with high net worth and ultra-high net worth investors and families who want what we call financial serenity – the feeling that comes when you know your finances and the lifestyle you desire have been secured for life, and that you don’t have to do any of the work to manage and maintain it because you hired a trusted advisor to take care of everything.