Investment Management Fees:What Every Affluent Individual Needs to Know
As an affluent individual with more than $5 million in investable wealth, you may think you possess a good understanding of the investment world. It is important you know the basic concepts but an investment management expert brings in-depth knowledge and expertise to the table. They can help you optimize your portfolio performance and maximize your investment returns.Using intelligent strategies, they will help you achieve your long-term objectives and build a financial legacy. That being said, investment management fees may be a concern for you.People may tell you to save your money instead of paying a professional to do something you can do independently. The truth, however, is that an investment manager can help you save plenty of money while building wealth in the long run. To delve deeper into this topic, please request a copy of our exclusive book,7 Secrets to High-Net-Worth Investment Management, Estate, Tax, and Financial Planning.
STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION
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.
For further details, you can consult with our financial advisors at Pillar Wealth Management. Boasting a wealth of experience working with affluent individuals who want to invest $5 to $500 million, it’s safe to say that we understand the nuances of high net worth investing. We possess the skills and resources required to help you overcome your financial challenges and grow your wealth for a financially secure future.You can sign up for various services, including portfolio management, risk management, and tax planning.
In this blog, we’ll discuss how an investment manager can help you on your wealth-building journey and how much investment management fees you should expect to pay.
Let’s get started!
Benefits of Hiring an Investment Manager
Affluent clients with $5 million to $500 million in liquid assets often get confused and overwhelmed when making important investment decisions. Their emotions may also get in the way of choosing to do what’s right for them in the long run. Managing your investments without external help is always risky – and not doing anything about it is even worse.
To not risk losing your money before your golden years and want to fulfill all your dreams, you’ll find our guide on portfolio optimization worthwhile. It features market insights and insider tips to help you understand the ins and outs of building a well-balanced portfolio for financial success.
Without further ado, let’s explore the benefits of working with an investment manager.
Custom-Tailored Portfolio Design
Investment management can be a tedious process, especially if you don’t have proper knowledge of different asset classes and investment strategies. The perfect portfolio warrants your time and continuous efforts. You have to study various products and evaluate their risks and returns as per the market conditions. You must know where to invest, how much to invest, and at what time. Only with a careful performance forecast can you determine if an investment will take you a step closer to your goals.
An easy way out is by hiring an investment management expert. They will conduct the necessary market research and use their knowledge, analytical skills, and expertise to find the best investment options for you. As a result, you’ll be able to create a well-optimized portfolio that increases the chances of you building your desired financial legacy.
Your investment manager will keep your goals, challenges, and risk tolerance in mind when investing your wealth. They will ensure you exploit all the opportunities that promise greater returns in the long run. Discover five other shifts that you need to make for investment portfolio optimization in our exclusive guide here.
One of the most convincing reasons to work with an investment manager is that they create an effective retirement plan based on your unique financial situation.They will employ smart strategies to maximize your savings and create new income sources to eliminate your risk of running out of money after retirement. You can expect them to plan things with certain factors in mind, including inflation, your risk appetite, retirement goals, as well as how close your retirement is.
One of the reasons affluent individuals find investment management challenging is that it involves a lot of risks. Without proper expertise and a well-thought-out plan, you can’t eliminate risk from the equation. In fact, you may expose your portfolio to many dangers and increase your chances of losing wealth by taking the DIY route.
An investment management expert knows how to minimize risk using different strategies.They focus on portfolio diversification as a means of spreading risk and securing your wealth.In addition to investing your money in multiple companies, they may devise the ideal asset allocation plan for you to minimize the risk further.
Financial specialists at Pillar Wealth Management possess market data worth over a hundred years. This means that we are in the best position to evaluate your portfolio and ensure you achieve your goals without risking the wealth you’ve accumulated over the years.
If you’re looking for investment advice and want to create a diversified portfolio, please get in touch with us or order a 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 for free.
Continued Portfolio Adjustments
The market situation never stays the same. An asset generating good profits today may not be so strong tomorrow. Market shifts can expose certain assets to added risk and make some investments less profitable.
Over the years, your financial situation and goals may change as well. You may decide to start a business, buy a new property, or travel around the world after retirement.
Considering this, it’s easy to see why your investment strategy and portfolio need continued adjustments.Investment management experts stay on top of the market changes and modify their clients’ portfolios accordingly.
Putting your trust in someone for managing your investments, no matter how knowledgeable and experienced they are, isn’t easy. However, once you find the right expert, you won’t have to worry about anything.
Most investment management experts offer fiduciary services, meaning that they prioritize their clients’ interests and satisfaction over everything else. Following a strict standard of care, they ensure they provide each client with the best advice and guidance without any conflicts of interest.
In addition to this, fiduciary experts are obligated to disclose all information related to their services, including the perks, risks, and conflicts of interest. They keep you in the loop to ensure peace of mind. Book a non-obligatory consultation with our fiduciary financial experts today.
Investment management experts aim to help you achieve lifelong financial serenity. They do so by allocating all your assets and handling financial matters smartly. You can expect them to make important financial decisions on your behalf and do what’s best for you in the long run.
Your chosen expert will eliminate stress and confusion from the investment management process to not have to worry about financial risks.
What is the Average Fee for a Managed Investment Account?
A managed investment account refers to a portfolio of bonds and stocks owned by a single individual. Your chosen investment manager oversees and manages the account’s operations to help you achieve your long-term objectives. They make decisions based on your specific goals, needs, risk tolerance, and asset size.
Since managed accounts require a minimum investment of a six-figure dollar amount, it is ideal for high net worth and ultra-high net worth individuals.
You can discover how to find experts for a managed investment account by requesting a free copy of our book, 7 Secrets to High-Net-Worth Investment Management, Estate, Tax and Financial Planning.
That being said, layers of fees that come with the wrong type of managed account can be costly. The higher the investment management charges, the lower your returns will be. With investment management services, you can’t expect to receive higher returns just because you’re paying more.
Professional investment managers usually charge 1% in addition to using the account’s funds. This means the total fees can be about 1.25%, which is reasonable. However, if the expert charges more, you may have to pay total charges of 2% to 3% per year, which is a lot.
What is a Reasonable Investment Management Fee?
Before discussing investment management fees, let’s see why working with one is beneficial for affluent individuals.
For starters, an investment manager follows a disciplined process to invest your wealth and allocate your assets, allowing you to build a high-performing portfolio. You can rely on them to create an appropriate allocation andpick low-cost funds to fill in that allocation. Additionally, they will monitor your portfolio and make changes to rebalance it when needed. They will also keep you updated on your annual percentage return so that you know you’re heading in the right direction.
Investment managers generally charge a percentage of the total assets under management. The industry’s average is 0.96%. You can expect it todecreasedepending on the size of your investment account.
A reasonable fee for affluent clients will be 1% at $1 million and 0.50% at $10 million. Based on these calculations, a client may have to pay as much as $50,000 for a $1 million account.
Since you have more than $5 million to invest, you should look for an expert specializing in working with high net worth and ultra high net worth clients.They will possess the level of knowledge, skills, and expertise required to handle your assets.
Below are a few helpful tips on choosing the right expert with reasonable investment management fees.
Conduct a Thorough Background Check
First and foremost, affluent individuals must gather necessary information about an investment management expert before signing up for their services. The idea is to weed out good specialists from the not-so-competent ones.
You should ask about an expert’s certifications and licenses to ensure they are professionally trained to handle your investments. You can also confirm if they are fiduciary experts so that you know that they will prioritize your interests above all.
Look for Experienced Managers
As an affluent individual, you should work with someone who has years of experience managing investment portfolios for ultra high net worth clients. They should understand the process and be equipped with the latest market insightsto make the right investment decisions on your behalf.
Don’t Hesitate to Ask Questions
When meeting with a potential investment manager, you must not shy away from asking questions. The answers you receive will give you a clear idea of what to expect moving forward.
Please note that it’s not just about shooting questions but asking the right ones. You should begin by inquiring about the costs you may face. The expert should be able to outline the expenses and develop an action plan to reduce them along the way. Essentially, they should be comfortable answering your questions and explaining their investment management approach in detail. They must also have a transparent fee structure to ensure there are no unpleasant surprises later.
Working with Pillar Wealth Management: Is Our Investment Management Fee Worth It?
As we said, working with the right expert is the key to successful investment management. At Pillar Wealth Management, our financial specialists have everything they need to execute an intelligent investment strategy and bridge the gap between your current financial situation and your dreams. We exclusively work with clients who want to invest $5 million to $500 million.
Our investment management fees are also pretty reasonable. We offer a transparent fee structure because we believe in working as a team.Your investment manager will take the time to understand your circumstances, determine your needs, and find the best possible way to achieve your investment objectives.
Apart from investment management, you can sign up for our financial planning, retirement planning, estate planning, and tax management services. We are at your service to listen to your concerns and answer your questions. Click here to schedule a complimentary meeting with us today.
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