The Complete Guide to What We Do
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.
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.
Table of Contents
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.
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