Best Money Manager
A high net worth individual has many responsibilities on his/her shoulders. The proper management of wealth, its protection from the volatilities of life, and its steady growth are all critical to the long-term well being of a high net worth family. Working with the Best Money Manager is something that affluent individuals and families consider to address all of the above points. By the way, if you happen to have $10 million or more in investible liquid assets, then make sure you check out this specially written guide on how to go about selecting the best financial advisor.
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.
Many people may think that the more money one has, the less stress there is. People may think that affluent individuals have easier decisions to make. However, if you have made a few million dollars, you know how hard it is to make that kind of money. You also appreciate how complex it is to manage that money. There are so many things to think about like taxes, inheritance, giving away and creating your legacy, etc. These topics require careful thinking and long-term planning. It is why many ultra-high net worth and high net worth individuals work with a professional (a.k.a wealth manager) who can help them make these very important decisions.
There are many types of wealth managers and if you just run a quick Google search, you will know what we mean. Take Pillar Wealth Management, for example, a niche wealth management firm focused on financial serenity for $5 million to $500 million portfolios. More on that later. First, let’s discuss what is wealth management, how you can find a wealth manager for high net worth portfolio, what are the strategies of a wealth manager, and why Pillar Wealth Manager is one of the best in USA.
What Is a Money Manager?
A money manager is a financial advisor who specializes in managing the finances of individuals and organizations. A money manager works with the client to prepare a financial plan to meet the client’s financial goals, tailored to their unique situation.
A financial plan acts as a framework for managing the client’s finances, including strategies for investments and retirement planning.
Depending on their credentials and compensation model, a money manager may be considered a fiduciary, meaning they work only for the best interests of their clients.
How Does Money Management Work
The money manager works with the client to establish an investment portfolio based on the interests of the client and their risk tolerance, establishing the appropriate asset allocation.
The manager is expected to monitor the investments and rebalance the allocation as necessary. The client may or may not want to be involved in monitoring the portfolio, which can be stressful, as many investments are not profitable in the short term.
The manager earns fees paid by the client, typically a percentage of the value of the assets under management. Some managers are paid commissions, although a fiduciary manager will not accept commissions, which may restrict their product offering.
Reasons to Use a Money Manager
Money managers usually hold a certification, such as CFP or RIA, that qualifies them to provide advice on a range of financial issues, particularly investments. Clients benefit from the expertise of these professionals, who work diligently to satisfy their clients’ wants and needs. These advisors are trained to analyze markets, study potentially profitable company stocks, and create balanced portfolios for their clients.
How Is a Money Manager Paid?
A money manager is usually paid a percentage of the value of the client’s portfolio as an annual fee. The percentage ranges from 0.50% to 2%, depending on the level of personalization provided and the size of the portfolio. The fee could also be a flat fee. A manager may also charge a flat fee or an hourly fee for a particular service. Some managers are paid commissions on the sale of certain products, and some also earn performance fees.
The best money management starts with tracking at least six months of your daily expenses, in detail, to get an overall view of how you spend your money. It’s an eye-opener.
Money managers charge fees for their services, typically a percentage of the value of the assets they manage for you. They may also charge a flat fee or an hourly fee.
A good money manager can be useful for someone with a complex financial situation, who wants advice on tasks such as managing their investments and planning for retirement.
An individual may hire a daily money manager to handle all their day-to-day financial transactions, either because their finances are confused or they don’t have time to do it themselves.
Money management is a profession practiced by individuals who are trained in providing financial advice. The job pays at least $75,000 per year and often quite a lot more.
Individuals who have money to invest but don’t know enough about the markets would benefit from having a money manager, as well as those who have complex financial needs.
Rich people often use wealth managers to manage their asset portfolios to grow their wealth and preserve it for their heirs, as well as for advice in charitable giving.
A good money manager has good relationship-building skills, is dedicated to helping clients achieve their goals, is highly skilled in developing customized investment strategies, and keeps learning.
Money management is a skill because doing it well requires time, effort, and in-depth knowledge of multiple areas of finance.
You can learn to manage money by talking to someone who is doing it successfully or to a professional financial advisor. You can also find online resources to help you.
9 Of The Best Money Managers Of All Time
1. Warren Buffett
Warren Buffett is the fifth-richest person in the world, with a net worth of $108 billion. He is generally recognized as a great investor and philanthropist.
Buffett was born in Omaha, Nebraska, got interested in business and investing early in life, attended Wharton, and graduated from the University of Nebraska at age 19. He created Buffett Partnership in 1956, which became the holding company Berkshire Hathaway after acquiring a firm by that name in 1978. Buffett has pledged to give away 99% of his fortune, primarily through the Bill and Melinda Gates Foundation.
Buffet learned a lot about investing at his father’s brokerage office. He first bought stock at age 11 and started saving early.
In 1957, Buffett operated three partnerships, and he became a millionaire in 1962, when his partnerships had an excess of over $7 million, with over $1 million held by Buffett.
Over the years, Buffett acquired stock in ABC, Salomon Inc, and Coca-Cola, among others, and became a billionaire in 1990, when Berkshire Hathaway began selling shares valued at $7,175. He became the richest person in the world in 2008, overtaking Bill Gates. However, during the financial crisis, Buffett lost $25 billion during a 12-month period in 2008–2009. Still, by 2014, the company was back to its pre-recession standards, making $6.4 billion in net profit in Q2 2014.
Buffett is known for his articles and letters to shareholders. He supports index funds and doubts that active management can outperform the market in the long run, recommending low-cost index funds that track diversified indices.
2. Benjamin Graham
Benjamin Graham was born in London in 1894 and died in Aix-en-Provence in 1976, having moved to New York at age one and lived in the US most of his life.
Graham is known as the “father of value investing.” He wrote two books that are foundational texts in neoclassical investing. After graduating from Columbia, Graham went to work on Wall Street. He started the Graham-Newman partnership. He taught at Columbia; Warren Buffett was one of his students and considered him the greatest influence in his life after his father.
Graham’s research in economics and investing has led to an interest in value investing. In the Northern Pipeline Affair, part of Graham’s research indicated Northern Pipeline Co. held vast assets not being put to good use, and he purchased sufficient shares to force a proxy vote to distribute those assets to shareholders.
Graham taught that good investments were based on facts and analysis, and corporations often muddied the water with their irregular and confusing financial reporting.
Later, Buffett declared Graham’s method to be outdated. However, some of his concepts are still required study for many new employees in finance.
3. Allan Gray
Allan Gray was born into a Scottish family in South Africa in 1938 and died in 2019 in Bermuda. He founded the Allan Gray investment company, the non-profit Allan Gray Orbis Foundation, and the Allan and Gill Gray Charitable Trust. He was strongly influenced by his grandmother, who was the first female mayor in South Africa.
Gray attended Harvard, founded Allan Gray Limited in Cape Town as an investment advisory firm, then created Orbis Investment Management in London in 1989, focusing on international markets. The firm Allan Gray was managing over $35 billion in assets by 2015, with a return on investment comparable to Berkshire Hathaway.
Allan Gray was a supporter of value investing.
4. Sir John Templeton
Sir John Templeton was a British investor, funds manager, and philanthropist; he was born in 1912 and died in 2008. His Templeton Growth fund experienced an average growth of over 15% per year for 38 years. He got involved in emerging market investing in the 1960s and has been called the greatest stock picker of the 20th century.
Templeton attended Yale and Oxford. He was a student of Benjamin Graham. Templeton became wealthy by buying distressed stocks during the Great Depression and at the start of WWII. He became a billionaire through the use of globally diversified mutual funds, beginning with introducing the Templeton Growth Fund in Japan.
In the market, Templeton focused on valuation and fundamental analysis. He invested in overlooked markets and overlooked stocks. In 2005, he predicted the 2008 crash.
5. George Soros
George Soros was born in Budapest, Hungary, in 1930. His net worth was $8.6 billion after donating $32 billion to the Open Society Foundations. The foundations support progressive and liberal causes, focusing on education and reducing poverty. As a result of his views, he has been the focus of various conspiracy theories. He has donated more than 64% of his fortune.
Soros developed his general theory of reflexivity for capital markets, which clarifies the foundation of value for securities.
Soros Fund Management was founded in 1970. The Soros Fund, later the Quantum Fund, grew to $400 million by 1981.
6. Carl Icahn
Carl Icahn is an American financier, born in New York in 1936. He owns 88% of Icahn Enterprises, a conglomerate headquartered in Sunny Isles Beach, Florida. The company owns Pep Boys, ACF Industries, PSC Metals, and others.
Icahn endorsed Donald Trump in the 2016 US presidential election. Trump announced Icahn as his choice for Treasury Secretary but instead nominated Steven Mnuchin.
7. Peter Lynch
Peter Lynch is an investor, mutual fund manager, and philanthropist. He was born in 1944 in Newton, MA, and was educated at U. Penn, Wharton School, and Boston College.
Lynch’s book, One up on Wall Street was a best-seller. In it, he explains his investment technique, including the two-minute drill and designing a portfolio, with his most famous being investing in what you know, or local knowledge. Investors can use their personal knowledge to pick little-known stocks that will grow. He explains how to interpret company literature and documents.
As the manager of the Magellan fund between 1977 and 1990, Lynch saw the fund achieve a 29.2% average annual return, more than double the S&P 500 index. He focused on individual companies, both large ones and eventually smaller and international stocks.
8. Ray Dalio
Ray Dalio is a billionaire investor and hedge fund manager with a net worth of over $19 billion. He was educated at Harvard.
Dalio founded Bridgewater Associates in 1975, a firm that provides financial services to institutional investors such as banks and governments and has $140 billion in assets under management.
Bridgewater utilizes a global macro strategy, which focuses on large-scale events related to history and international relations, using data such as interest rate trends and international trade.
Dalio’s warnings about the 2008 recession were largely ignored.
9. Michael Steinhardt
Michael Steinhardt was born in 1940 in New York City; he was educated at the Wharton School and has a net worth of $1.2 billion.
Steinhardt founded Steinhardt Partners in 1967, which averaged an annual return of 24.5% for its clients between 1967 and 1995.
What Is Wealth Management?
If you are a high net worth or ultra-high net worth individual looking for a wealth manager, then it shows that you are proactive about your desire to achieve your financial goals. But first, let us answer a fundamental question – what is wealth management? Investopedia defines wealth management is an investment advisory that combines multiple areas of financial services to meet the needs of affluent clients. Wealth management is basically financial advisory for high net worth and ultra-high net worth clients who have diverse needs. Pillar Wealth Management is a wealth management firm that focuses on clients who have anywhere between $5 million and $500 million in investible liquid assets.
Think about a high net worth client that needs help with long-term and short-term capital gains tax, retirement planning, and real estate transactions. Imagine if an affluent entrepreneur is looking to sell his/her business and needs help with not only taxes and the deal structure, but also guidance on where to invest the windfall. Another example could be a wealthy family whose existing generation is approaching retirement age and where the business needs to be handed over to the next generation. Succession planning, inheritance tax, and other important topics are the talking points in such a situation. You can read more about what high net worth wealth management is in this book called The Ultimate Guide to Choosing the Best Financial Advisor: For Investors With $5 Million to $500 Million in Liquid Assets.
Wealth Management is about analyzing multiple financial aspects as well as the impact of a single financial decision on all of those aspects. Feel free to start a conversation with Pillar Wealth Management to discuss the experience and skill needed in dealing with examples of high net worth scenarios (and your situation) mentioned above.
Wealth Manager For High Net Worth
If you feel convinced that wealth management is for you, then the next step is to look for the Best Money Manager that you can find. In order to find a top wealth manager for high net worth accounts, you need some time and patience. We will list out some of the steps that you can take. But, we also encourage you to download this specially-curated guide on choosing the best financial advisor for investors with $5 million to $500 million in liquid investible assets.
You can certainly start the search process by looking up online for top wealth managers near your location. You can either look at a specific radius around your zip code, your city, or your state. Some wealth management firms operate on a national level as well. You should also be able to find reviews about those wealth management firms. Take a moment to browse through every wealth manager’s website and see the list of areas where the manager has experience in.
Reading articles and blogs in the mainstream media is a good way to get insight into how a wealth manager thinks. You can also ask the wealth manager to provide you with a couple of case studies that explain a particular situation along with the strategy that the wealth manager came up with to address the issue.
It is highly recommended that you schedule a one-on-one conversation with the final shortlisted wealth managers that seem the most appropriate for your needs. Speaking with the wealth manager gives you a chance to ask questions, get clarifications, and understand what kind of personality you will be working with. We encourage everyone to get in touch with Hutch Ashoo to discuss any questions that they have about wealth management.
Strategies Of A Wealth Manager
There are different kinds of wealth managers in the industry. They vary in size and in their way of working. One common aspect in their working is the threshold of account size that a wealth manager works with.
Every wealth management firm will specify the account size that they work with. For some, it could be $1 million or more in liquid assets, while for some others, it could be $10 million or more. Check with the wealth management firm on a case by case basis to know their range. Note that liquid assets do not include your home and other illiquid holdings. Liquid investible assets are those that are readily available for management by the wealth advisor.
The communication style of a wealth manager is also a defining factor. Some wealth managers are passive and will draw up a plan, invest the money, and then passively monitor. They will have interactions with the client as and when it is needed. They won’t tinker too much with the portfolio. There are large Wall Street firms that may have a standardized communication approach. They may send you regular newsletters or updates that are compiled electronically using a standard template.
Finally, there are niche boutique firms that handhold the client through every decision, big or small. Their approach is more personalized and you can call them on their cell phone whenever you face a financial question. Feel free to schedule a free consultation with Pillar Wealth Management to learn more about its wealth management strategy.
By the way, the strategy of the client towards wealth management is also important. To learn more, read this short guide on 5 critical shifts to maximize portfolio performance for families and individuals with $5 million to $500 million in liquid assets.
Some Points That Differentiate The Best Money Manager From The Rest
We believe that the Best Money Managers have some specific qualities that differentiate their service quality from the rest. A wealth manager is someone who you will trust with your hard-earned wealth. Therefore, you would expect your wealth manager to be ethical, honest, and always act in your best interest. We believe that this happens when an advisor is a registered fiduciary and when the compensation model is correctly structured.
A fiduciary is an advisor that has to register with the SEC or the state regulator. He/she is required, by law, to always act in the best interests of his/her client. The fiduciary also has to point out any instance of conflict of interest to the client. A fiduciary is motivated to always act right because his/her fiduciary registration is at stake. Therefore, a fiduciary wealth management firm is a positive quality in our opinion. Feel free to call Hutch Ashoo or Chris Snyder to discuss how being a fiduciary has allowed Pillar Wealth Management to deliver top services to its clients.
The fee structure is also equally important. It basically aligns the incentives of the wealth manager and influences how the advisor acts and makes decisions. There are three models, fee-only, fee-based, and commission-only. A fee-only model is one where there are no commissions. The fees are pre-determined and the advisor is compensated for providing the best possible advice. The fee-based and commission-only models involve product commissions. So, there is a possibility that the wealth advisor gets motivated to earn a commission and ends up “pushing” a product that the client does not really need. The actions of the wealth manager are not fully aligned with the best interests of the client. They are partially aligned towards getting rewarded through commissions while also providing advice to the client.
A word on investment costs
Many wealth managers and portfolio managers are focused completely on beating the market. They want to generate superior returns for their investors by whatever means possible. However, the actual returns that a high net worth or ultra-high net worth client gets in hand is the one after paying taxes, expenses, brokerage fees, and other costs. Therefore, even though the gross returns may be spectacular, the subsequent costs can eat into that outperformance. There is no point in taking high risks, generating high returns, and then watch the net return drop down to something similar to a low-risk low-cost investment instrument.
You may have heard of passive funds, ETFs, and index funds. These instruments are low-risk, relatively lower-return options. They won’t give you a 20% return year after year, but they are also less volatile. Their expense ratios are minimal. If you can save on short-term capital gains taxes and a whole lot of stress while still achieve your financial goals, then why take on higher risk? Imagine a fund manager changing from one stock to another multiple times during a year and you having to foot the short-term capital gains tax bill. Why not invest for a longer term and pay a lower long-term capital gains tax instead?
Consider a fund manager investing in an expensive fancy fund that delivers no superior return after removing the expenses. Investment management is a complex topic that requires a broad-based approach rather than just focusing on gross returns. It is also important that the wealth manager makes the all-important connection between your financial goals and your investments. We discuss the philosophy of investment cost management in this complimentary guide on maximizing portfolio performance for investors with $5 million to $500 million in liquid assets.
Pillar Wealth Manager Is One Of The Best In USA
Pillar Wealth Manager is one of the best in USA because of its process and its approach. The firm takes on a few clients and is not hesitant to turn new business away in order to preserve the quality of its services. In fact, Pillar took up only 17 new clients last year. Pillar also simulates over 1,000 scenarios and stress tests client portfolios every few months.
Clients that call our office are addressed by their first names because we know every one of our clients. Pillar Wealth Management strives to offer white-glove wealth management services. The philosophy of the firm is financial serenity i.e. making the client feel confident in achieving their short, medium, and long-term goals while sleeping peacefully at night.
Hutch Ashoo and Christopher Snyder are the expert founders of independent, fee-only, and fiduciary wealth management firm Pillar Wealth Management. If you would like to speak with them or simply ask any questions about how custom and trusted wealth management advice is offered to highnet worth individuals with $5 million to $500 million in investible assets, then feel free to start a conversation.
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.