Asset Wealth Management – What Is It and Why You Need It
While you may have managed to accumulate $5 million to $500 million in liquid assets, growing your wealth further from there will not be easy. There will be much at stake. However, it’s not impossible either. All you need is the right advisor to help you with asset wealth management to grow your wealth in a sustainable manner.But should you choose asset management or wealth management? This is a critical question, and to find out the answer, you will have to keep reading. Alternatively, you can also request a copy of our book, 7 Secrets to High-Net-Worth Investment Management, Estate, Tax, and Financial Planning, where we outline how important it is to choose the right advisor and services according to your specific needs when looking to invest $5+ million worth of assets.
STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION
7 Secrets To High Net Worth Investment Management, Estate, Tax and Financial Planning
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.
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You can also save your time and get in contact with Pillar Wealth Management directly. Our advisors can set up a no-obligation meeting where they will listen to all your financial concerns and future plans and help you devise a suitable strategy to meet your goals efficiently. Our private firm has been in the business for more than thirty years, which has allowed us to garner extensive experience and expertise to deal with the complex financial problems of high or ultra-high-net-worth individuals. Our fiduciary financial advisors only take on a small number of clients every year because we value each of our clients and are dedicated to helping them succeed.
In this blog, we’ll be going over asset and wealth management definition, the differences between the two, and why you should consider wealth management. Let’s get into it.
What is Meant by Asset Management?
Asset management is a complex service similar to investment management. Your asset manager will help you choose the right assets to include in your portfolio. These could include stocks, bonds, mutual funds, and much more.
Depending on which stage you are in life, your portfolio will consist of a different ratio of assets. For instance, during your early age, your asset manager may recommend you to invest in more stocks as they offer higher returns, and you would be in a position where you could bear the high risks of it as well.
However, as you grow older and grow nearer to retirement, you won’t be able to take that many risks. Therefore, your asset management goal would shift towards maintaining a steady source of income through your retirement rather than just growing your assets.
Similarly, asset management also involves protecting your assets and wealth by minimizing the risks associated with it. This can also be done in several ways. For instance, your advisor will suggest portfolio diversification and asset allocation to protect your wealth from a number of risks and unforeseen events.
Learn how such risk management can save you from catastrophic losses, as well as about other shifts you need to make from our guide on portfolio growth strategies.
All this just presents the tip of the asset management iceberg. Asset management also involves a lot of research and analysis to evaluate the profitability of potential investment assets. It involves constantly watching the market and following trends to predict portfolio outcomes. It involves capitalizing on new opportunities and using various different tools and software to leverage your portfolio performance.
At Pillar Wealth Management, we even test our clients’ portfolios against 100 years of market data and various hypothetical situations to see how the portfolio performs. Accordingly, we help our clients choose specific assets and take the right precautionary measures to keep them prepared for any situation and save them from major losses.
We suggest reading our fantastic guide on portfolio performance to learn about some of the other strategies we utilize.
So, what is the difference between asset management and investment management?
Usually, these terms are often used interchangeably. That’s because they are quite similar with very few subtle differences. Nevertheless, it is important to distinguish between the two so that you know exactly what you need.
As mentioned earlier, asset management involves the collective management of assets of an individual. Since it is a complex service with a lot of different sub-services, it tends to be quite expensive. Therefore, it is often limited to high-net-worth individuals and ultra-high-net-worth families who have large and diverse portfolios.
Investment management also involves many of the same tasks and responsibilities. However, it is not necessarily limited to the ultra-wealthy. Private investors or small firms can also carry out investment management themselves. It can also be focused on a certain type of asset, such as stocks or bonds.
There is not a huge difference between the two. However, when you are availing any of these services, you should discuss at length with your advisor what and how they plan to help you with your investments, as this will give you an idea of whether they are right for you or not.
You can also learn more about what investment management entails for high-net-worth investors looking to invest $5 million or greater worth of liquid assets by requesting a free copy of our brilliant book about the secrets behind high-net-worth investment management and financial planning.
What is Wealth Management?
As a high-net-worth individual looking to invest $5 million to $500 million in liquid assets, you may think that asset management is enough for you. After all, it will help you grow your assets and increase your wealth. So, what else could you want?
Well, there’s no doubt that asset management is important for ultra-high-net-worth individuals and families. However, that’s not all they need for holistic wealth management and to attain financial serenity. That’s where wealth management comes in.
Wealth management is a comprehensive and much more holistic approach to growing, protecting, and sustaining your wealth throughout your life and then in the generations after as well. It includes everything that is included in asset management and more.
For instance, it considers your tax implications. For every asset that you invest in and reap profits from, you will have to pay taxes on it. What’s the use of a comprehensive investment strategy if you earn millions and millions of dollars every year but end up losing 20, 30, or even 40% of it to taxes?
Similarly, if you were saving all your wealth to pass on to your beneficiaries, how would you feel when you learn that a major chunk of it is going to taxes? That’s why wealth management includes tax planning and optimization. Likewise, some other services included are:
• Retirement planning
• Estate planning
• Debt management
• Cashflow planning
You can also book a free conversation with Pillar Wealth Management to learn about the full range of our services.
What is the Difference Between Asset Management and Wealth Management?
Now, you might be wondering what the difference is between asset management and wealth management. Well, for starters, asset management only focuses on one aspect of your wealth, i.e., the assets.
However, wealth management has a much more holistic approach, where it considers the cost implications of asset management as well and works to minimize it. Similarly, wealth management covers a much broader scope and can include legacy planning, philanthropic planning, and many other things that affect your financial position.
Wealth management often includes asset management, but asset management does not include all the services included in wealth management. Besides that, asset management and wealth management can work on different compensation models as well. This is not necessarily always the case, but asset management sometimesworks on a commission-based payment model.
This means that your advisor earns a commission every time you buy or sell a certain asset. This can create a conflict of interest sometimes as the advisor may recommend you products that earn them better commissions rather than those which are best for you.
In comparison, most wealth managers operate on a fee-only basis, such as those at Pillar Wealth Management. This fee is usually 1% of the total assets under management. With such advisors, your best interests are always aligned, so you can trust them to always guide you in good faith.Connect with our fee-only advisors to learn more about our fee structure.
Why High-Net-Worth Individuals Need Asset Wealth Management
If you are still confused about whether you should go for asset wealth management or not, here are some reasons that will help you decide. As mentioned earlier, wealth management encompasses a wide variety of services.
High-net-worth individuals can try to avail these services separately from different institutions, but this only drives up their costs due to the multiple management fees. Moreover, it also renders their overall wealth management strategy inefficient as all important parts are not moving in tandem. One might be working towards a different goal while one may be headed in a different direction, causing a lot of confusion and inefficiencies.
Furthermore, wealth management often includes comprehensive financial planning, which is important for everyone but even more so for high-net-worth individuals with their significant wealth. Financial planning takes into account pretty much everything that could affect your financial health or your future financial success.
It takes into account all your short and long-term goals. It considers your vague life dreams and aspirations and breaks them down into actionable targets. It gives all your financial efforts a direction that you can then track over time and adjust as necessary.
Besides that, wealth managers are often fiduciaries, which means they are obligated to act honestly and always prioritize your best interests. Such advisors are important if you want to establish an open and trusting relationship that enables both parties to work towards their goals together.
Read our eye-opening book,The Art of Protecting Ultra-High-Net-Worth Portfolios and Estates – Strategies for Families Worth $25 million to $500 million, to discover other reasons why asset wealth management is so critical.
Whichever one you choose, it’s important that you take the time to evaluate your needs and understand which services you will require to meet all your goals. This can be a difficult task, and that’s why we recommend reaching out to a professional and discussing your concerns and the best options available for you. Asset wealth management will play a big role in your life and in impacting your financial position. It can be the difference between a certain and an uncertain retirement.
We suggest directing your concerns and queries to Pillar Wealth Management. Our dedicated advisors hold more than sixty years of experience altogether, along with a wide set of skills and extensive knowledge of the field. Our fee-only and fiduciary financial advisors offer a comprehensive list of financial services such as investment and portfolio management, tax optimization, financial planning, retirement planning, estate planning, and much more. Unlike major financial institutions, we genuinely care about your financial success, and that’s why we always try to understand our clients’ needs and personal circumstances before developing personalized financial solutions. If that’s something you are looking for, then click here to plan a free consultation with our experienced advisors today.
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.
You see, our goal is to only accept 17 new clients this year. Clients who have from $5 million to $500 million in liquid investable assets to entrust us with on a 100% fee basis. No commissions and no products for sale.
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