Asset Management Firms: How They Can Help
Whether or not you are aware of how financial markets work, reputable asset management firms and their financial experts can be useful in guiding you in managing your assets. Individuals with high-value assets are more in need of expert advice in order to secure their hard-earned money and use their assets to generate more income.
We understand the needs of ultra-high net worth families, and that is why we have prepared our Ultimate Guide just for you. It can help you choose the best financial advisor for investors with over 10 million dollars in liquid assets. Click here to receive your free copy!
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.
Asset management firms are not the only money management companies that can help you manage your assets. In particular, wealth management companies are skilled in handling portfolios of wealthy investors who have multiple assets spread across numerous accounts. At Pillar Wealth Management, we specialize in providing an array of financial management services to clients with 5 million to 500 million in liquid assets. You can contact one of our wealth managers to learn how we can help you manage your portfolio.
Regarding firms that provide only asset management services, you might have a few questions on your mind, such as “How do I find an asset management firm?” or “How much money do I need to hire an asset management firm?” In this article, we will answer these questions and outline how exactly asset management firms help you manage your assets. However, first, we need to understand what asset management is and why you might need it.
10 Largest Investment Management Firms
As of January 2022, BlackRock, Inc. had $10 trillion in assets under management. The company, which is based in New York City, was originally founded in 1988 as an institutional asset manager. BlackRock has offices in 70 countries and clients in 100 countries.
BlackRock is the world’s largest investment company. Its massive technology platform manages over $20 trillion in assets. In 2020, the company was approved to trade in China.
2. The Vanguard Group
The Vanguard Group was founded in 1975 and has its headquarters in Valley Forge, PA. The firm has about 18,000 employees and $7.2 trillion in assets under management.
Vanguard is the world’s largest provider of exchange-traded funds (ETFs), after BlackRock’s iShares, and the largest provider of mutual funds. Vanguard has some of the best low-cost ETFs on the market.
3. UBS Group
UBS is a Swiss company that operates in 40 countries with more than 23,000 employees. It has four divisions — Global Wealth Management, Personal & Corporate Banking, Asset Management, and Investment Bank.
UBS Wealth Way is a program that provides financial advice to wealthy individuals and families worldwide, transforming their aspirations into a strategy. The Wealth Way process begins with acquiring a comprehensive understanding of your goals, the people who matter to you, and your hopes and aspirations.
Fidelity Investments was founded in 1945. The firm has its headquarters in Boston, MA. Fidelity has approximately $4.5 trillion in assets under management. In 2021, its revenues exceeded $24 billion. It was the first major investment company to offer mutual funds to the public.
The company introduced its zero-expense-ratio mutual funds in 2018, along with four zero-expense-ratio equity funds.
5. State Street Global Advisors
State Street Global Advisors, founded in 1978, is the fifth-largest asset manager in the world. It is the investment arm of State Street Corporation, with headquarters in Boston, MA. The firm has over 30 offices globally with 500 investment professionals. In 1993, State Street Global launched the first-ever ETF, which is still in use.
State Street Global clients are employers, consultants, and endowments, seeking to maximize the returns on their investments while minimizing risks.
State Street Global owns and controls 142 ETFs and 26 mutual funds.
6. Morgan Stanley
Morgan Stanley is a multinational investment management firm founded in 1935. It has its headquarters are in New York City, with offices in more than 40 countries.
Morgan Stanley’s main business focuses on institutional securities, wealth management, and investment management.
Morgan Stanley acquired the E*TRADE platform in 2020 and Eaton Vance in 2021.
7. JPMorgan Chase
JPMorgan Chase & Company is a multinational investment bank founded in 2000 and headquartered in NYC. It is the largest bank in the US and the owner of JP Morgan Chase Bank and JP Morgan Securities. The bank provides private banking and wealth management.
JPMorgan offers mutual funds, ETFs, retirement funds, and 529 funds. It provides self-directed Investing, which allows the investor to make unlimited commission-free online trades through the company’s mobile app or at Chase.com.
Allianz SE is a German multinational financial services company; its headquarters are in Munich. Its main business activities are insurance and asset management. In 2001, Allianz completed its acquisition of Dresdner Bank.
Allianz operates in over 70 countries and has about 150,000 employees. It has also been ranked first among the world’s most important insurance brands.
9. Capital Group
The Capital Group was founded in 1931 and has its headquarters in Los Angeles, CA. It has over $2 trillion in assets under management.
Capital’s products, including about 36 mutual funds, are focused on active management while taking a long-term approach, protecting it from severe market changes. The company’s Growth Fund of America was the largest actively managed fund in the US as of 2020, with around $!50 billion in assets.
10. Goldman Sachs
Goldman Sachs was founded in 1869 and has its headquarters in New York City. The firm provides wealth management, asset management, and banking services to individuals, businesses, corporations, and institutions. The firm has over 40,000 employees worldwide.
The firm began managing pension funds in 1988; it managed Microsoft’s IPO, which generated $61 million, and it now has a real estate division.
The Importance of Asset Management
Asset management is the process of handling tangible and intangible assets to enhance their value. In financial asset management, professionals or firms are used to handle the investments of wealthy individuals. They can do this by investing your wealth in bonds, stocks, real estate, indices, or other vehicles to help you achieve your financial goals.
Asset management firms pool investments from multiple individual and institutional investors with the aim to make profitable investment decisions to provide the client with maximum returns. They invest in capital assets such as stocks, bonds, real estate, and more and manage the investments to keep in line with the client’s financial objectives.
At asset management firms, professionals known as fund managers or asset managers study the market and industry risks to recommend investment opportunities to you. Asset management firms can move your wealth around between multiple accounts, i.e., margin loans, investment accounts, checking accounts, etc.
Asset management allows you to navigate your portfolio, implement strategic plans to reduce taxes, costs, and fees, and manage your liquid and non-liquid assets in a way to grow and secure your wealth. Diverse portfolios can contain large amounts of assets, especially for wealthy investors. Asset management firms can help you keep track of your assets and how they are being used.
Financial experts at asset management firms can help you make smart purchasing decisions and monitor your portfolio’s performance. Moreover, they can identify risks that you are exposed to. For example, the ownership or use of a particular asset could be causing you more financial harm. Managing your assets helps you come up with solutions to protect yourself from potential liabilities.
4 Key Ways Asset Management Firms Can Help You
If you have been investing for a long time, you might think you don’t need asset management. However, it would help if you remembered that asset management firms may use strategies and methods that you are unaware of to help you generate more income and reduce your risk.
Deciding to work with a particular investment manager needs lots of consideration. For example, as an investor, you need to know that you have someone that you can trust to manage your assets. An asset manager that can provide financial services based on your current financial situation. If you can find an advisor like this, you can achieve all of your investment objectives without encountering many obstacles.
By comparison, it is safe to say that managing wealth is like managing a business website. For instance, the IT expert will do market research to understand audience insights in order to draw visitors to the website. In wealth management, the advisor needs to comprehend the client’s financial circumstances (audience insight) so he or she can construct a plan to enhance the client’s assets; deep analysis should be done to develop customized financial advice for the client.
Back at the website, there will be work to process data, evaluate content, content profiles, and ad profiles, which are commonly assessed while working on the site. Some things should be done to improve the website to increase profit, such as product development, measuring ad and content performance, analyzing geolocation data and device characteristics, and much more. Similarly, in financial management, the advisors must understand every element of their clients’ finances. By doing so, the job of creating a personalized financial plan is made easier.
So, are asset management firms worth it? Let’s discuss how their services can be of benefit to you.
1. Asset Management Firms Help You Allocate Your Assets
When you work with asset management firms, they become responsible for making investment decisions that benefit you and align with your financial objectives. Asset allocation depends on your financial goals, and asset management firms can use multiple vehicles to invest your wealth safely, such as mutual funds, cash, equities, stocks, real estate, or bonds.
For example, if your goal is to generate more returns, they will allocate more of your assets to high-risk, high-reward investments. If you want to save up for your retirement, asset management firms will distribute your assets accordingly by investing in low-risk investments that generate long-term returns.
2. Asset Management Firms Do Extensive Research and Analysis
Building a portfolio requires a great deal of research and analysis into the performance of the various asset classes. This involves studying the market, monitoring fund performance, controlling micro- and macro- economic variables, and creating reports to help fund managers make the best decisions. As an affluent investor, your asset classes and investment profile will differ from the average investor. Expert asset managers at asset management firms can research and provide you with options that improve your portfolio performance and help you enhance your wealth. You can read more about how to improve portfolio performance in our guide.
3. Asset Management Firms Can Construct A Customized Portfolio for You
Asset management firms can build your portfolio by choosing the securities you should buy or sell depending on the market findings and trends studied by researchers and analysts. High net worth portfolios are built differently from regular portfolios, as wealthy investors tend to have a more aggressive investment approach to increase their wealth.
A good asset manager or fund manager will advise you on investments that give you high rewards but will also invest in securities that safeguard your wealth. This crucial balance depends on the experience and expertise of the firm you work with. We discuss more how affluent families can protect their fortune in our hard-cover book, The Art of Protecting Ultra-High Net Worth Portfolios and Estates – Strategies for Families Worth $25 Million To $500 Million.
4. Asset Management Firms Can Review and Rebalance Your Portfolio’s Performance
Whenever you invest your money, you want to stay updated on how well it is performing in the market. Doing this yourself takes a lot of time and effort, which you could be using elsewhere to pursue different avenues. A good asset management firm will provide you regular reviews of your portfolio’s performance, keeping you updated on any changes that need to be made. They can rebalance your asset allocation in the event that your financial goals change due to any reason.
Putting your wealth in the right hands should be your priority. Asset management firms that abide by a fiduciary standard of care are generally more reliable. Our wealth managers are fiduciaries and can give you expert asset management advice. Book a call with us to start a conversation.
What to Consider When Choosing Between Asset Management Firms
The next reasonable question on your mind should be, “How do I find an asset management firm?” You can find asset management firms by searching online and doing a background check into their credentials and reputation. Alternatively, you could take recommendations from your peers or co-workers who might have experience working with these firms. If you have over 10 million dollars in investable assets, it is critical that you select the right financial advisor to trust. Our guide can help you determine the best advisor to suit your needs.
In any case, there are a few factors you should consider before you hire an asset management firm. We have highlighted the most important ones below.
1. Reputability and Client History
The firm you choose should have a clientele similar to your financial profile, as this will result in you receiving the services expected for a wealthy investor. Moreover, a company or firm’s reputation speaks volumes. If they have great reviews, it is a sign that their clients were satisfied with their service. Credentials and certifications can back up this claim and give you peace of mind that the people handling your investments are qualified for the job.
It would be wise to inquire how they helped improve their client’s portfolio performance. Satisfied clients are an indication that the firm knows how to implement strategies, tools, investment products to maximize portfolio performance. You can learn more about these strategies in our five critical shifts guide.
2. Fee Payment Structure
One of the most important questions to ask when choosing which firm to hire is, “How much money do I need to hire an asset management firm?” Their fee structure can be based on how they compensate their asset managers and the specifics of your portfolio.
Some firms can charge five thousand to ten thousand dollars in annual fees, while others can charge a percentage of shared profits earned. Transaction fees and commissions can add up to cost you more than you imagined; hence, you should read the fine print before signing any agreement with an asset management firm.
Fee-only asset management firms charge a management fee and do not make commissions off your profits. They are the most preferred choice as their payment structure does not result in conflicts of interest regarding investment advice.
3. Knowledge and Expertise
Extensive and thorough knowledge is what sets apart the average asset management firm from a great one. The firm you work with should have enough experience and information about the market and various asset vehicles to provide you with multiple opportunities for growth. Every client’s needs vary, and they must have tools and strategies to cater to your individual portfolio’s requirements, whether it is aggressive or passive, high-risk or low-risk.
You can test their knowledge by asking them specific questions in your consultation. You can use our Ultimate Guide for reference. It highlights the best questions you should ask before selecting any financial advisor. Their answers will help you gauge an idea of whether they are the right fit for your financial profile.
Asset management requires focus and devotion. Finding the right asset management firm to trust will give you mental security and reassurance that your wealth is in safe hands. Our wealth managers abide by a strict fiduciary standard of care, putting your interests above their own. Contact us to learn how we can assist you with your asset management.
A Few Last Words
Suppose you are a high net worth individual who lives in New York City, Los Angeles, Chicago, or some other city. You may have heard about some investment management companies that claim to be the world’s largest asset management company. This claim is generally based on the amount of their assets under management (AUM). Management firms such as Vanguard Group, State Street Global Advisors, Morgan Stanley, Global Wealth & Investment Management, among others, claim to be the big names in financial management, whether it is in the U.S. or worldwide.
The issue is that many people are flabbergasted by the numbers and think that by hiring an advisor from one of those firms, they will be working with a top financial advisor. However, you should understand that many “big-number” financial firms are unable to meet the expectations of their clients due to the fact that they provide only generalized financial planning. This is crucial because an advisor should never implement the same approach for a new client that he implemented for a previous one.
Therefore, you have to remember the basic values that investment managers should have. For instance, having a fiduciary standard and fee-only payment structure are some of the qualities that decent advisors should have. Their success does not depend on their AUM; it depends on other more significant factors, which it can help you to consider when evaluating asset management companies.
Why You Should Select Pillar Wealth Management
Selecting asset management firms is ideal for investors who only want to gain expert insight into their asset management and portfolio management. However, we believe that wealthy investors deserve a well-rounded service to cater to an array of their financial needs. The more money you have, the more risk it carries and the harder it gets to keep track of it. Wealth managers are financial experts in managing large fortunes and optimizing portfolios for wealth enhancement and asset protection, two factors that are imperative for rich people.
If you wish to take advantage of an array of wealth management services, you can contact us at Pillar Wealth Management. We have worked with affluent families with 5 million to 500 million in investable liquid assets for over six decades. This makes us well-equipped to understand the unique goals of high net worth and ultra-high net worth clients. You can reach out to us by scheduling a meeting with one of our wealth managers today!
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Frequently Asked Question About Asset Management Firm
An asset management firm pools together money from its clients and invests that money in securities. The company may buy and sell property, cash, and other funds.
Asset management firms manage various classes of assets, such as stocks and bonds, indexed funds, cryptocurrencies, REITs, precious metals, art, and antiques.
Investment firms make money from customers who pay investment advisory fees, which are usually based on the value of the customer’s investments held by the firm.
Word of mouth is one way to find a firm. Also, doing some research online can help you find a firm that meets your needs. Look at the customer reviews and SEC filings, too.
For example, Vanguard Group owns 37 million shares in PNC Financial Services, which is publicly traded.
The portfolio manager develops an investment strategy that meets the needs of the client. The strategy includes selecting investments and then deciding when to buy and sell particular investments.
A good investment strategy meets the client’s short- and long-term goals, has a balanced portfolio of asset classes, and accounts for the client’s risk tolerance.
Assets are regularly monitored for their performance and to maintain a balance between asset classes to maximize earnings and minimize risk and taxes, as well as to find new opportunities.
Both asset management firms and wealth management firms provide financial services. Wealth management is focused more on individuals and organizations that have over $1 million to invest.
Utilizing an asset management firm allows you to pool funds with other investors to access investments not otherwise available. You can benefit from the knowledge and expertise of an asset manager.
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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