Offering Exclusive High Net Worth Portfolio, Estate and Tax Protection Strategies developed over 30+ years
Offering Exclusive High Net Worth Portfolio, Estate and Tax Protection Strategies developed over 30+ years
Producing strong investment returns is one of the most significant achievements that a wealthy investor could strive for. However, you might not necessarily have the expertise and resources to generate profitable gains consistently on your own. This is where asset management companies come in. Whether or not you choose to enlist their services or hire a financial expert of your own, you need to be sure you’re working with the best of the best. Our Ultimate Guide can help investors with more than 10 million dollars in liquid investments find the best financial advisor for them.
Our firm, Pillar Wealth Management, can offer you unbiased, expert advice on asset management in addition to other wealth management services. We are experienced in dealing with the portfolios and high-value assets of high net worth and ultra-high net worth investors with 5 million to 500 million dollars in liquid investments. To work with one of our skilled managers, you can book a free consultation. We can help you identify if you’re on track to achieving your financial goals.
Table of Contents
Table of Contents
What is Meant by Asset Management?
In general terms,asset management means the regulation of tangible and intangible assets to increase their value. Other categories include physical asset management and compliance asset management, pertaining to digital assets and contracts. In the finance sector, asset management holds a slightly different meaning.
Financial asset management involves financial experts, companies, or firms that manage investments for a wealthy clientele. For example, an asset manager or investment manager would track, handle, and overlook their client’s portfolio and assets. Wealth managers can help with asset management and boost your portfolio’s performance. You can read our Performance Guide to learn about some of the strategies we use at our wealth management firm.
Asset management companies invest money in various vehicles, including bonds, stocks, real estate, and indices, while catering to your financial goals. Their service is designed for clients with diverse portfolios that contain large amounts of assets, such as high net worth individuals, corporations, governments, institutions, and large nonprofit foundations.
The process of asset management allows you to navigate your investment portfolio, create strategic plans to minimize taxes, costs, and fees, and manage your liquid and illiquid assets appropriately. The asset classes that these companies can assist you with include lease investment, investments in debt capital markets, fixed income, deposits, trade receivables, among others.
The Role of Asset Management Companies in Financial Management
If you’re seeking a firm to help you manage your assets, you might be wondering, “What does asset management companies do?” Although some companies specialize in particular asset managementcategories, many give you an option of services to choose from.
Asset management companies’ services can comprise long-term passive investing, long-term value investing, hedge funds, launching and investing in mutual funds, opening and monitoring individual accounts for affluent investors, insurance company asset management, and creating retirement plans.
An asset management company hires financial experts who specialize in particular fields, for example, financial analysts, economists, and asset managers. Financial analysts research investment options, potential opportunities and determine the best time to buy or sell assets. Economists observe the current market situation for any fluctuations or downturns. Lastly, asset managers use the information collected by financial analysts and economists to liaise with clients and recommend asset management decisions.
The Advantages and Disadvantages of Asset Management Companies
An asset management company has the advantage of being able to invest in large asset classes, such as multi-billion-dollar infrastructure projects, that an individual investor would not have access to. They can purchase more securities at a negotiated price since large operations’ per-unit costs are lower, and overhead costs are reduced. Additionally, you can move your wealth between multiple accounts, from credit cards and investment accounts to margin loans and checking accounts.
Every investment carries a risk, however small. Asset management is no exception. An asset management company can underperform, which can cost them a lot of money. Most companies come with a considerably high management fee which must be paid regardless of the client’s portfolio performance. If you’re looking to maximize your portfolio’s growth, our five critical shifts guide can help you.
The asset manager you work with should understand your wishes and goals. A reputable firm will take the time to communicate with you and suggest different strategies to help you achieve the financial life you envision for yourself.
How Can Asset Management Help Wealthy Investors?
Taxes come with all new income sources, whether you have a Social Security account or a pension. Affluent investors are continuously seeking ways to minimize their taxes. If you wish to withdraw money from these accounts, they tend to come with tax bills that can often be hefty if you choose to withdraw a large amount of money or if you withdraw your savings early.
An asset management company can monitor your taxes by mapping out a plan to allow you to enjoy your standard of living without losing your money to unnecessary expenses. It can give you access to investing tools and products that give you financial stability. An experienced asset manager can enable you to maintain high levels of financial independence and freedom well into your retirement.
Now that you have a clearer understanding of what an asset manager does, asset management companies worth it can give you the financial security you need. Our book, The Art of Protecting Ultra-High Net Worth Portfolios and Estates – Strategies for Families Worth $25 Million To $500 Million, is useful in understanding the different threats wealthy investors might face and how to overcome them.
How To Protect Your Assets
Protecting your assets is necessary when you have spent years accumulating your wealth. Your wealth should be able to sustain you even through retirement and unforeseen circumstances. This raises the question, “What does asset management companies do to safeguard your wealth?”
You might think your assets are secure, but threats can arise from multiple places, such as malpractice claims, discrimination, sexual harassment lawsuits and accusations, divorce, debt, employee accidents and injuries, personal injury lawsuits, and medical issues.
An asset management company can help you set up a proper business entity to protect some of your assets from lawsuits. They can provide you with an array of insurance options, from commercial liability insurance to life insurance. The best asset management companies will also create protective barriers for your retirement accounts.
Wealth transfer is another concern for rich investors. Pillar Wealth Management uses strategies to protect your wealth and safely transfer it to your heirs. Our wealth managers know that you and your family deserve the best money management and asset management services out there. Contact us to start a conversation about how you can protect your assets effectively and get the most out of your investment portfolio.
Selecting the Right Company for Asset Management
When it comes to selecting a suitable asset management company, there are a few things you should keep in mind. Each firm can have its area of specialization or may offer generalized financial services and products that their investors might be interested in. Similarly, they might have asset managers who are experts in varying fields.
Some asset management companies can narrow their services to long-term investors who prefer a passive investing or value investing approach. Others might function through private, individually managed accounts for their wealthy clients or hedge funds. Hence, it would help if you did your research into any asset management company that you consider and identify their clientele, services, and fee structure.
An asset management firm will typically have various advisors with different specialties and levels of experience. Looking into their credentials and capabilities will give you an insight into their legitimacy. It is vital to understand how the company works with your wealth to create the portfolio that you want. It is crucial for ultra-high net worth clients with a net worth above 10 million dollars to make this decision after heavy consideration. Our guide can help you understand the qualities you should look for in a financial advisor.
What is their Fee Structure?
Asset management companies can change their fee structure based on your portfolio’sspecifics and how they compensate their managers.
The investment fee can range from a few basis points to a considerable percentage of shared profits earned through performance-agreement accounts. Some firms might charge a minimum annual fee starting at five thousand dollars to ten thousand dollars.
Be cautious when studying their payment structure, as some firms might have a low asset management cost, but they earn their money through transaction fees and commissions. Alternatively, firms might have no upfront transaction fees or commissions but may charge more on products and services that you’re offered.
A fee-only asset management firm makes money only through their management fee, not through commissions or products. For many clients, this is preferable as it eliminates any conflict of interest by ensuring that the firm gives objective investment advice to benefit the client.
When you have a fortune that you want to protect, selecting a financial advisor or money management firm with the right cost structure is necessary. We discuss more on this topic in our guide, The Ultimate Guide to Choosing a Financial Advisor.
Should You Go with Asset Management or Wealth Management?
As a wealthy investor, you might have heard that wealth management is the best option for you. So, how do wealth management services differ from asset management companies’ services?
Asset management, as you should know by now, focuses entirely on investments. The firm usually caters only to clients who have a high net worth and helps them allocate their assets.Their goal is to grow your portfolio by making smart purchasing decisions to enhance your returns while minimizing risks.
Wealth management, like asset management, caters specifically to high net worth or ultra-high net worth clients. The difference is that they take a closer look into your or your family’s financial situation. Asset management is only one part of their array of services, which can include estate planning, legacy planning, financial planning, risk management, and even philanthropic goals. With an in-depth analysis of your finances, wealth managers can guide you on protecting and managing your wealth effectively. Their fiduciary code of conduct ensures that your money is in safe, reliable hands and is not squandered because of unnecessary conflicts of interest.
The service you choose to go with will depend on your personal preference and your level of wealth. It is up to you to decide which one will serve you best in helping you achieve your financial goals. If you would like to contact one of our experienced wealth managers for a second opinion, you can schedule a meeting with us.
For high net worth and ultra-high net worth investors, asset management has become a complex tax and only gets more complicated as you gain more wealth or start planning your retirement. Asset management companies work with wealthy families to create a plan and help them manage their investments strategically.
Pillar Wealth Management has an asset management system that gives you a projection of how well your financial plan is aligned with your short-term and long-term goals. We work exclusively with affluent investors who have a net worth of 5 million to 500 million dollars; therefore, we know how to approach high-value assets that might be dispersed across numerous accounts. Our asset managers use strategic asset management processes to optimize your portfolio performance, keeping in mind your risk tolerance and desired lifestyle. Call us to start a conversation about how our services can help you with your wealth and investment management.
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