If you have accumulated an enormous amount of wealth but aren’t good at managing, protecting, and boosting it further, hiring a professional wealth management company is a tremendous solution. Not only do these firms offer high-level financial planning services and advice, but they also offer a complete wealth management solution covering investments, estate planning, business succession planning, and tax management. Pillar Wealth Management is one such highly reputable firm that offers top-class wealth management services to investors holding $5 million to $500 million in liquid assets.

If you’re an affluent individual, hiring a wealth management service can make your life a lot easier. With the right wealth management firm, you should be able to reach your financial goals faster than otherwise. We recommend getting started by studying our guide titled 7 Secrets to High Net Worth Investment Management, Estate, Tax, and Financial Planning, especially if your wealth exceeds $10 million.

Table of Contents

Which Wealth Management Company is the Best?
How Much Do Wealth Management Firms Charge?
Is it Worth the Money to Hire a Wealth Management Firm?
Conclusion

In the meantime, this guide will discuss everything you need to know about high net worth wealth management firms. Let’s begin with determining which wealth management company is the best.

Which Wealth Management Company is the Best?

The best wealth management companies possess the following characteristics.

Internal Transparency

The Ponzi schemes and accounting scandals of recent years have clarified why blindly relying on entities without conducting due diligence can compromise personal dreams, lifestyles, and fortunes. This is why experts recognize trustworthiness as the single most critical screening criterion for a wealth management firm for the wealthy, particularly for high net worth individuals. But how do you determine whether or not a wealth management firm can be trusted? Through internal transparency.

Internal transparency is crucial to handling matters of interpersonal trust. Even the highest level of technical competence can be undermined by interactions that lack integrity and honesty. To learn more about the importance of internal transparency on a wealth management firm’s part, schedule a video consultation meeting with our wealth managers today!

High Flexibility

Managing financials in today’s interconnected and rapidly evolving social, political, and economic environment requires maximum flexibility on a wealth manager’s part. While various elements like illiquid long-term investments and trusts can limit flexibility, the best wealth management firms have a reasonable degree of tractability in addressing unpredictable circumstances.

Hence, experienced wealth managers understand that life is subject to continual change, including the tax and regulatory environment. In such as landscape, the only effective way to ensure that high net worth clients achieve the best possible outcomes is to stay flexible. Successful wealth management firms thus revisit strategies from time to time and don’t hesitate to revise them when required.

Cohesiveness

This is another significant characteristic of successful wealth management firms. Cohesiveness has to do with achieving the optimal combination of services, products, legal strategies, and investments. The best results in wealth management are achieved by fully integrating various financial elements and a complete understanding of the economic environment and the client’s circumstances.

Situational Awareness

Everyone wants to boost their wealth, but successful investing extends well beyond selecting options that make money in the minimum possible time. The best wealth management firms will evaluate your financial past, present, and future and use those insights to make investment decisions that help accomplish your goals with minimal risk and time spent. To obtain a deeper idea about what it takes to grow your investment portfolio, take a look at our guide titled 5 Critical Shifts For Maximizing Portfolio Growth Strategies – For Families Worth $5 Million To $500 Million.

Reliable wealth management companies will also assess your retirement accounts and tax situation with the goal of minimizing your tax burden.

This is referred to as situational awareness. Your chosen wealth management firm should combine its knowledge of investing with situational awareness to create a productive wealth management strategy.

Composure

Equanimity is just as important in stressful as in favorable conditions. Whether a financial market is bullish or bearish should have little effect on this characteristic. An astute wealth manager will not panic when there’s a dip in the market nor loosen focus or rejoice when it picks up. They’ll consistently have a goal-oriented and logical view.

Hence, the right wealth management firm won’t make any desperate move in response to the underperformance of an asset class. Similarly, when returns exceed expectations, they won’t make any overconfident decisions.

Hence, look for a wealth manager who possesses a consistently calm character, no matter the circumstances.

Seasoned Innovator

Your wealth manager should also be a seasoned innovator, which means in addition to extensive experience, they must have an energetic, fresh perspective on both current and future investment options. With an awareness of history, they must know which options have been performing well in the past as well as be receptive to emerging markets and new approaches that might be lucrative.

Your wealth manager should be someone who thinks out of the box, presenting alternative views and options that may secure your portfolio from unconsidered risk and invigorate it. Instead of being rigidly dedicated to set models, these experts should combine enthusiasm with wisdom. They should certainly respect investment tradition but at the same time appreciate the dynamic and vital aspects of the market as well as the client’s unique goals.

Now that you’re aware of the characteristics of the most successful wealth management firms, read our guide titled Ultimate Guide to Choosing the Best Financial Advisor for Families worth $5 Million to $500 Million to hire the right wealth management firm.

Let’s now address your next concern, “How much do wealth management firms charge?”

How Much Do Wealth Management Firms Charge?

Different wealth management firms charge their clients differently, so it’s no wonder that new clients are confused about how much they should reasonably pay. The following are options for what wealth management firms charge for their services.

Flat Fees

Some wealth management firms charge a flat fee for their services. They’ll provide clients with a services list, including the fees per service. This type of fee structure works best for self-directed investors who only seek advice from wealth managers or opt to use asset allocation models that are complex.

Other investors allow their advisors to take control of their investment portfolios and make decisions on their behalf. In this case, flat fees range between $1,000 and $2000.

Hourly Rates

Some wealth management firms charge clients by the hour, based on the type of advisory services they provide. The hourly rate they charge typically ranges between $150 and $400 an hour. This variation depends on whether they have a highly valued area of expertise and on their experience.

The total cost of the project under this type of fee structure can range between $2,000 and $5,000, depending on the scope of the services. For example, if it includes the development of an estate plan, expect to pay a high total feel. To learn more about how hourly rates work for wealth management services, schedule a video consultation with our wealth managers at your convenience.

Assets Under Management (AUM) Fees

Many firms use assets under management as the basis of their fee structure, where they charge a percentage of the value of the assets they manage, typically 1% to 2% of the client’s net assets. If a client’s portfolio is valued at one million dollars and the AUM rate is 1%, the advisor will receive $10,000 a year. The percentage tends to be lower for portfolios with a high number of assets.

This AUM fee structure often proves most expensive for the client, but it has the advantage that the wealth manager would not take risks as their own money is at stake. Since their fee or income directly depends on the client’s assets, it is in their interest to improve the client’s portfolio performance. They won’t take risks that are outrageously big. For an idea about how to improve the performance of your investment portfolio, study our Performance Guide.

Commission-Based Fees

With this type of fee structure, wealth management firms receive their compensation or fee based on product sales. For every financial transaction, such as purchasing a stock, they get paid in the form of a commission.

Wealth managers using this type of fee structure often prioritize the sale of financial products over providing financial advice or planning services. This is why there can be a conflict of interest between the advisor and the client. For example, the advisor may recommend financial products that are not in the best interests of the client.

Fee-Only

This is a flexible fee structure by which the wealth management firm will structure their fees in a variety of ways, such as by asset under management, by the hour, by project, or even by a combination of these.

Since their fee doesn’t depend on the sale of financial products, they tend to give more personalized advice based on their clients’ best interests and financial goals. This makes them less biased than advisors who charge commission-based fees.

As a high net worth individual, you might be wondering what type of fee structure is the best for you. To determine this, think about what you expect from your wealth manager, including how much you want them to be involved in your financial affairs.

If you’re approaching retirement and need nothing more than financial advice, consider hiring a wealth manager who charges a flat or hourly fee. In contrast, a fee-only or AUM-based structure might be better if you need comprehensive wealth management services and want to build a long-term relationship with an advisor.

Let’s now answer your next question, “Is it worth the money to hire a wealth management firm?”

Is it Worth the Money to Hire a Wealth Management Firm?

You might be wondering why you should consider hiring a wealth manager when you have tons of information at your disposal through the internet. It’s important to understand that our financial lives are interrelated and complicated. Pulling one lever will have an inadvertent impact on another aspect of our lives. When you haven’t done something before, how can you be sure you’ll get the best results?

In most cases, hiring a wealth management firm is worthwhile because the firm can keep you on track and proactively identify financial opportunities and risks for you. You recognize the value of experience in every walk of life, so why discount it when your hard-earned money and savings are at stake?

Plus, if you’re among those whose accounts are scattered across different institutions, it might be difficult to determine where you stand financially, especially when you lack an investment or savings strategy. In this case, too, it’s best to rely on a financial advisor rather than going on your own. A wealth manager could assist you in consolidating or moving IRAs, brokerage accounts, and old 401(k)s into one place.

Conclusion

Now that you know a lot about high net worth wealth management firms, it’s time to make some concrete decisions and hire a reliable wealth management firm. Whether you’re looking for some basic advice or full-fledged wealth management services, get in touch with Pillar Wealth Management, a highly reputable firm that specializes in serving affluent investors with $5 million to $500 million in liquid assets. To hire a wealth manager, schedule a video meeting with us today!

Authors

Hutch Ashoo

Chris Snyder

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.

High Net Worth Wealth Management Firms