How To Find The Best Investment Companies

Pillar Wealth Management specializes in investment management and works with high net worth and ultra-high net worth clients with $5 million to $500 million in investable assets. Click here to book a free consultation with us.

Use our list to start your search for the perfect investment advisor that meets your family’s needs. For those of you with between $5 million to $500 million, our investment company, Pillar Wealth Management, LLC., might be a great fit for you.

What Is an Investment Company? 

The primary activities of an investment company (which is a business, corporation, partnership, or limited liability company) are to issue securities and invest in securities. An investment company invests the money it receives from its clients, who then share in the profits earned by the securities in which they invest.

Three Types of Investment Companies

There are three types of investment companies: mutual funds (known as open-end companies), closed-end funds, and unit investment trusts (UITs).

Mutual fund and UIT shares are redeemable, which means they can be sold back to the company or to a broker acting for the fund. Closed-end fund shares are not redeemable, which means shares have to be sold to other investors on the secondary market.

A closed-end fund invests the money raised in its IPO in stocks, bonds, and other securities. It sells a fixed number of shares at any one time, and the shares are traded on a stock market such as NASDAQ.

A UIT will typically make a one-time public offering of a fixed number of securities. They may operate a secondary market. A UIT will terminate on a date specified when the UIT is created.

ETFs are not mutual funds. They are generally structured as open-end funds but may be UITs as well.

Other types of mutual funds are stock funds, bond funds, and money market funds. An index fund is a type of mutual fund or UIT.

Benefits Of Investment Companies

There are several benefits of pooling funds with other investors. Because investment companies employ qualified financial advisors, they provide services that help investors achieve their goals. Moreover, pooling funds allows investors to access securities that may not be affordable otherwise.

Investing in funds rather than individual securities means that the investor is diversifying their investments. As a result, the overall risk of the investment is minimized.

Pooling funds lowers the cost of investing. The investor pays lower fees, resulting in greater earnings.

The expense ratio of an investment is the portion of the value of the asset that is taken up by the fund’s operating expenses. Some funds even have a zero expense ratio, while a good ratio is less than 1%.

Caveats for Investment Companies

Only invest in funds issued by well-respected, reputable companies. Be sure you understand the fees and costs of all your investments.

Do careful research on every company that interests you. You can access the public disclosures of any investment company and financial advisor on the SEC website.

For any funds you invest in, study the documentation carefully.

Types of Investments Through Investment Companies

Stock funds invest in equities, which vary depending on the fund’s objectives and strategies. For example, a stock fund may invest only in blue chip companies that pay dividends; another may invest in technology companies with more growth potential. The performance of the stock fund depends on the financial condition of the companies in the fund.

Bond funds invest in bonds, which may vary based on the type of bond. Bonds can be government bonds, municipal bonds, corporate bonds, convertible bonds, mortgage-backed securities, zero-coupon bonds, or a mixture of types. Bond securities are not free of risk.

An index fund is a type of mutual fund or UIT. The objective of an index fund is to achieve the same return as a particular market index, such as the S&P 500, Dow Jones, or the Nasdaq-100. Management of index funds is passive because the fund manager only tracks the securities in the index, resulting in lower fees and lower capital gains.

A mutual fund utilizes pooled money from many investors and invests the money in stocks, bonds, and other securities. Investors purchase shares in the fund directly from the fund or from a broker for the fund. Shares cannot be purchased on a secondary market such as the NYSE.

Exchange-traded funds (ETFs) provide a means for investors to pool their money to invest in stocks, bonds, or other assets. Some ETFs are passively-managed index funds; others are actively managed funds that trade investments tied to a particular objective.

Why Should You Use an Investment Company?

Let’s face it, investing your money can be a daunting task. This is especially true if you have over $5 million in assets and you maintain a well-diversified portfolio. Whenever you’re looking for a financial advisor to grow your investment portfolio, your decision should be based on more than the total amount of assets an investment company manages.

The biggest and best investment company will not only manage your investment portfolio, but they’ll also get to know your unique financial situation and the goals you would like to achieve, including creating generational wealth.

In today’s technological world, there are more ways than ever to invest. There are robo-advisors that offer computerized assistance for selecting securities, without any human interaction. Then you have discount brokers, who simply help conduct a financial transaction after you yourself determine how best to manage your wealth.

Finally, you have investment companies, where you receive full-service wealth management. When you want a personal touch and would prefer that all your financial and investment needs are met, finding an investment manager is truly the best option. It can also save you massive amounts of money by avoiding mistakes that you might not even know you are making.

As a high net worth individual, why manage everything yourself when an investment advisor can achieve better results? With countless options on how and where to invest your money, going the do-it-yourself route can quickly become a full-time job.

If you have questions about retirement accounts, college funds, tax savings, asset classes, and other investing details, it’s best to rely on professionals with proven track records. Your wealth manager from an investment company like Pillar Wealth Management LLC. can quickly answer your questions so that you can make the best financial decisions, before moving on to the things that truly bring you happiness.

They can set your financial needs on cruise control, so you have more time to do the things that really matter for you, like running your business or making time for family.

It’s understandable while asking yourself, “which investment companies are best for me,” that you consider differences in price between firms.

However, a full-service investment company that manages your assets will bring more peace of mind. Plus, on average a wealth manager will lead to more value add than their costs, when compared to a self-managed investment fund. When you look at the benefits over the years of working with an advisor, the costs will pay for themselves.

With that said, not all investment companies are created equal. If you need help differentiating between qualified investment companies and unqualified ones, click here to read our guide.

Here are the things to consider while researching the best investment companies in 2019, leading to your 2020 options.

What Should You Search for In an Investment Company?

The specific things that you should look for in an investment company depend on your investing mindset. Here are some factors that might be important for you while researching investment companies.

The Right Services

When it comes to managing your investment portfolio, what level of service matches your needs?

There are several types of investment companies. Some wealth managers focus on a narrow selection of investments. It is best to consider firms that specialize if you want to add a specific asset class to your portfolio.

For example, if you feel like you need to balance your current portfolio with real estate or foreign investments, then you might consider working with a wealth manager that specializes in these specific investments or has a team member dedicated to doing so.

Alternatively, there are investment firms whose sole purpose is to educate you. This is an option if you want a more hands-on approach to managing your wealth, or you’re just curious about the investment options that are available. While you can usually ask questions directly to your investment manager, some firms will also hold educational workshops and seminars on important topics.

On the other hand, you might want a wealth advisor who takes a holistic approach. If you need to establish a new investment portfolio, or you need comprehensive help managing your assets, then a full-service investment company is better suited to you. Generally, companies that offer a range of services will require the least hands-on management of your investment portfolio, saving you time while your assets grow on autopilot.

To learn more about which factors influence the performance of your investment portfolio, click here to read our guide.

The Investment Company’s Specific Qualifications

• Current Investment Management Registrations
• Fiduciary Duties
• Investment Company’s Pay Structure
• Mutual Requirements
• Your desired level of involvement

When someone manages anywhere from $5 million to $500 million of your assets, as we do at Pillar Wealth Management, LLC., your relationship must be built on trust. Here are some factors to consider while researching trustworthy investment companies and advisors.

Current Investment Management Registrations

Is the firm or individual investor you’re considering registered with a state, federal, or private regulatory authority? There are several regulatory bodies that your investment firm or agent might work with. You can verify each firm’s credentials online within seconds.

Fiduciary Duties

Does the firm or advisor have fiduciary obligations to their clients? The answer is most likely yes, if they’re registered with a regulatory body. However, you should clarify this point, as some advisors may only have suitability standards to follow. That is a big difference.

When it comes to working with someone that has a duty to work in your best interest, versus someone that simply needs to meet certain standards, it’s always best to work with the advisor that’s required to make choices that are optimal for you. Make sure your interests are aligned by finding a Fiduciary.

To understand the importance of hiring a fiduciary, click here to read our guide on how to find a financial advisor for individuals having over $10 million in liquid assets.

Investment Company’s Pay Structure

Generally, you’ll pay an annual percentage of your portfolio while working with a full-service investment company. However, there might be some additional costs to consider while working with the biggest and best investment company for you.

Therefore, discuss the pay structure for managing your account. Discover which of the following ways each investment firm earns money, including:

With ongoing percentage fees. How often does each company charge? What’s the percentage amount you can expect?

In commissions. Does your investment company or advisor earn commissions on certain products they recommend to you?

Utilizing flat fees. Do you pay a certain amount per transaction? How active does your investment manager buy and sell securities?

For specific services. If your advisor does research or educates you on a specific investment topic, will you owe a fee?

Mutual Requirements

The final consideration while selecting an investment company is whether their advisors meet your needs. Here’s how to tell if the company you’re considering is a good match.

As a high net worth individual, you want to make sure that the company and advisor you’re considering can effectively manage a multi-million dollar portfolio. Likewise, you should verify what their minimum investment requirement is. Both factors will help you determine whether you’re suited for each other.

Your desired level of involvement.

Some investment company representatives will work solely as advisors, while others will do all the investing and maintenance of your assets. Determine how much you want a say in what occurs with your investment portfolio and afterwards decide on a company and advisor.

What Should You Expect from An Investment Company?

While considering which investment companies are best for me, it’s important to realize that a great wealth manager does more than just buy and sell financial assets. For a firm to do the best possible job, they should do more than make trades.

• Does your investment advisor meet with you to conduct a needs analysis, determine your investment stage, and learn about your risk tolerance?

Everyone is at a different stage in their life. Your needs will be vastly different from another person’s. For this reason, your investment manager should understand the needs of you and your family.

An exceptional advisor will also understand your immediate and future goals. They’ll know how much risk you can take on and whether you prefer to aggressively grow your portfolio or conservatively protect your wealth.

It’s this fundamental knowledge that forms the basis of your financial investments, so an investment company should understand this information before ever conducting a transaction on your behalf.

If you want to learn more about the importance of hiring an advisor that pursues your goals in a strategic manner, click here to read our guide on the 5 critical shifts that boost your investment portfolio.

• Will they address both financial and non-financial related questions you have?

As you work with an investment manager, there will be times where you have questions. You might wonder whether you should buy into the latest investment. Likewise, you may have non-investment related questions like whether it’s better to buy or rent a home.

A great investment manager is also an educator. Look for someone that provides resources on a website, in email content, or over the phone whenever you have a pressing question. How an advisor teaches will explain a lot about their mindset and performance.

• Can they explain investment strategies that will minimize your investment risk?

There are cycles to every market. How does your investment advisor perform during the distinct cycles? Maintaining wealth is just as important as growing it. Thus, the person you work with should do their best to mitigate risks through diversification, tax structures, and other strategies.

• Do they purchase, sell, and trade assets for you, while explaining the benefits of these financial transactions?

Another question that will inevitably come up is why one asset was favored over another in your portfolio. You should expect your company to take notes on every transaction they conduct. If they’re acting as your fiduciary, there should be a logical reason for conducting every transaction your investment advisor makes.

How To Find The Best Investment Companies in 2019?

• BlackRock
• Pillar Wealth Management
• The Vanguard Group
• Bridgewater Associates

Using the criteria explained above, we were able to answer the question, “what are the best investment companies?” While compiling this list, we considered an investment firm’s services, qualifications, and assets under management with high net worth individuals.

We’ve also compared our selections with the best investment companies in 2019 listed on well-respected financial publications. Here are some investment companies that you might consider interviewing.

What Are the Best Investment Companies?

• BlackRock

BlackRock has managed money for over 30 years and works with clients in countries around the world. They created the iShares Core exchange traded funds, which track major stock indexes and often outperform similar mutual funds with higher fees.

• Pillar Wealth Management

We are very proud of what we have accomplished for our clients, so because this is our blog, and without any shame we will throw our hat in the midst. Our team Pillar Wealth Management, LLC. deserves to be on this list.

We’re a fiduciary that works 100% on fees, and we personalize our service to the needs of our high and ultra-high net worth clientele. In fact, we’re only accepting 17 new clients in 2020 to provide top-tier investment advice to those we work for.

Want to learn more about what sets Pillar Wealth Management, LLC. apart from other investment companies? Order a free hardcover copy of our book, The Art of Protecting Ultra-High Net Worth Portfolios and Estates – Strategies For Families Worth $25 Million To $500 Million today.

• The Vanguard Group

Investors that want more control of their portfolio and less interaction with advisors usually go with an option such as Vanguard. They offer a solid selection of funds to invest in, however in our opinion their financial planning is basic and for do-it-yourselfers.

Vanguard does not provide a wide selection of services for high net worth individuals. Instead, they allow you to invest in different funds and your money in their funds are invested the same whether you invest $10 million or just $100 per month. You are at the mercy of the fund manager for taxes!

If you’re searching for more holistic investment approach then you’re better off working with a company that provides tax assistance, estate planning, and other services targeted toward ultra-high net worth investors.

• Bridgewater Associates

With the Bridgewater hedge fund firm, you can invest in any of their funds. They currently utilize three funds with different investment strategies. There’s the Pure Alpha, All Weather, and Pure Alpha Major Markets funds, which each come with their own annual fees.

Bridgewater works with institutional clients and are a good choice in an investment firm if you run a pension fund, endowment, or foundation.

What Is the Biggest and Best Investment Company?

When it comes to answering the question, “which investment companies are the best for me,” it really depends on your current financial situation. Every company offers something different, so it’s really about finding advisors that understand you and the needs of your family.

If you have between $5 million and $500 million in liquid investable assets that you are looking to invest and you’re interested in finding an investment company to help manage your assets, consider working with the team at Pillar Wealth Management. Schedule your free consultation and receive our free resource titled Improving Portfolio Performance: The Shifts Multi-Millionaires Must Make To Achieve Financial Security And Serenity.

We promise that you’ll be impressed with our service-oriented view on managing wealth for high-net worth investors and families.