Investment Management Firm – How to Choose One

When you have $10 million to $500 million or even greater in liquid assets, there is no easy to grow your wealth in a sustainable manner while you protect your assets. For starters, it’s hard to find someone you trust enough to discuss all your financial concerns and then allow them to participate in the decision-making process. Even if you do trust them, it’s hard to find someone with the right set of skills and experience who can expertly align all your investment strategies with your personal goals and safeguard your interests. For a full and in-depth analysis in a 70+ page book specifically written for high net worth investors looking to invest $5 million or more you can request your copy for free here.

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However, to do it all on your own is even harder and much riskier. That’s why high-net-worth investors worth $10 million or more need to partner with an investment management firm and a suitable advisor to sustain their wealth and meet all their goals. Such individuals can learn to find the best financial advisors for their investment needs from our comprehensive guide.

Pillar Wealth Management has been offering various financial advisory, financial planning, and wealth management services, including investment and portfolio management. Altogether, our financial advisors and wealth managers have been serving high-net-worth clients exclusively for more than six decades now. This extensive experience, combined with our expert skills, allows us to draft complex investment plans and strategies that best cater to our client’s needs while also minimizing risk and costs. We use more than 100 years of market data to test our portfolios in a number of different settings and optimize it accordingly. Plan a free discussion with the advisors at Pillar Wealth Management today to get started on your investment goals.

In this blog, we’ll be discussing why an investment management firm is so crucial for high-net-worth individuals and, accordingly, how they can choose one. Let’s get started.

Table of Contents
What Does an Investment Management Firm Do? Why is an Investment Management Firm So Crucial for the High-Net-Worth? Risk Management Personalized Investment Plan Retirement Planning Dedicated Advisor How Do I Choose an Investment Firm? Wrapping Up

What Does an Investment Management Firm Do?

An investment management firm is a financial institution that serves wealthy individuals and helps them invest and manage their assets. While this sounds simple and straightforward enough, there’s a lot that these firms have to do to ensure that their client’s goals are met.

Before they even start investing, they have to do extensive research on which investments will be best for their clients, the past performance and fore casted performance of those investments, the market conditions locally and internationally, and many other factors.

Similarly, they have to devise the perfect combination of assets for the portfolio and execute the investments. Set up a no-obligation discussion with our advisors to learn more about what investment management entails.

Why is an Investment Management Firm So Crucial for the High-Net-Worth?

After accumulating $5 million to $500 million in liquid assets, you may be thinking that you don’t need investment management at all, or even if you do, you can manage to do it yourself. This can be quite risky and turn out to be a big mistake.

When all of your considerable wealth is at stake, you definitely want the best professionals out there handling your assets. Just like when you need surgery, and you wouldn’t risk operating on yourself, when it comes to your wealth and assets, you need an investment management firm to handle it.

Here’s why they are so crucial for the high-net-worth.

Expertise

Investment management firms carry much more experience, and therefore, have more expertise and better skills at executing successful and profitable investments. They carry a much deeper understanding of how the market works.

They use the right tools that help them analyze future opportunities and risks. As a result, they are able to capitalize on upcoming investment opportunities while minimizing your risk and costs. Their expertise helps you benefit from investments before other players catch on and help you grow your portfolio in a safe and sustainable manner.

Risk Management

For high-net-worth individuals with $5 million to $500 million in liquid assets, investment management goes hand in hand with risk management. However, if they attempt to do it on their own, it’s always hard to set up the right risk management measures.

For instance, they might diversify their portfolio across 20 different stocks in the energy sector, thinking they have minimized their risk. However, if something happens that affects the entire energy sector, it will affect all these stocks, eventually leaving such affluent individuals near bankruptcy.

That’s why they need to work with an investment management firm that focuses on portfolio diversification as well as asset allocation to minimize risk effectively. Learn how else your financial advisor can protect your assets by reading our book, The Art of Protecting Ultra-High-Net-Worth Portfolios and Estates – Strategies for Families Worth $25 million to $500 million.

Personalized Investment Plan

When it comes to the success or effectiveness of your investment plans or even any other financial strategies, one of the biggest factors it depends on how personalized it is according to your goals. If you go to a private bank for investment management, all they will ask you is about your risk tolerance and expected growth or returns.

While these are certainly important things to consider, they are not the only things you need to think about. Your investment plan has to be based on your personal goals and aspirations in life. This includes your short as well long-term plans, your retirement plans, estate plans, and even any dreams and wishes you may have. Only when your investment plan and strategy tie in with these goals will it actually be successful. Learn why this is so important from our brilliant guide on portfolio performance.

Retirement Planning

Retirement planning is a critical part of any high net worth’s wealth management strategy. Everyone wants and is working to secure a financially safe and happy retirement. However, for high and ultra-high-net-worth families or individuals, this is much easier said than done.

Retirement planning is another reason why working with an investment management firm is so crucial for them. Your retirement plan will be directly dependent on your investment plan. Only through the right investment and portfolio growth strategies will you be able to grow and sustain your wealth long enough to live a financially secure retirement.

Moreover, your investment plan will also change according to which stage you are at in life. In your 20s or 30s, you can adopt a more aggressive investment strategy and afford to take more risks.

However, as you near retirement, your investment plan will shift towards more safe and less risky operations and focus on building an income stream for you after retirement. Get started with your retirement planning as soon as possible by scheduling a free discussion with Pillar Wealth Management.

Dedicated Advisor

Even if you are not handling your investments yourself, you still need to know everything about them. That’s why you need a dedicated advisor while working with an investment management firm who is always aware of the performance of your investments, is familiar with your unique personal circumstances, and is always available to answer any of your questions.

Other financial institutions often don’t provide dedicated advisors, and you always find yourself dealing with someone new. This can hurt the effectiveness of your investment strategy and even the trust between both parties.

How Do I Choose an Investment Firm?

Now comes the most difficult part: actually choosing an investment firm. You might be wondering, who is the biggest investment firm? Or what investment firm has the lowest fees? While these are major factors, they are not the only factors you need to consider to partner with the right investment management firm for yourself.

Rather than just searching online and picking the first firm that pops up, you should evaluate the firms on the following aspects and then choose one that is most appropriate for you.

Credentials

One of the first things affluent individuals need to check is their credentials, as this will help reveal a lot of vital information about the investment management firm. You need to thoroughly go through their credentials and licenses.

This will help you ensure that they have all the proper training and skills to help you and that they are licensed to provide the services they are offering. Certain financial advisors, such as certain brokers, are only allowed to help execute your investments and not advise you on them.

Moreover, when you are doing the background check on the investment management firm, you can also confirm if they have had any past lawsuits or cases against them.

Experience

When it comes to experience, there are two aspects you need to consider. Firstly, you need to consider their experience in offering investment management services. Training and licenses aside, there are certain skills and expertise that you can only build over time.

Only when they have been offering these services for 20 and 30 years will they have the necessary knowledge to develop successful portfolios and minimize risks. Secondly, the investment management firm should also have experience in dealing with high-net-worth individuals specifically.

Such affluent individuals have complex goals and even more complex challenges that are completely different from the average American. That’s why they need financial advisors who are specifically experienced in serving those clients so that they can cater to their needs more effectively.

Cost Management

The fee you pay the investment management firm will not be the only cost you will have to bear. In fact, there will be a number of other expenses such as taxes, broker fees, margin interests, internal costs, and much more.

Depending on the money management style, you will have to bear transactional costs as well, and you can learn more about it from our guide on portfolio growth strategies for millionaires with $5 million to $500 million in liquid assets. The investment firm or your advisor should not only be aware of all these extra costs but should be actively working to minimize them.

Otherwise, you will find yourself losing a significant portion of your wealth every year, leaving your investment and overall wealth management strategy ineffective. If your advisor isn’t telling you about all these costs, it’s a big sign that they are leading you towards an uncertain retirement. Go through our guide on the right financial advisors to learn about more of these signs.

Wrapping Up

Working with an investment management firm, the right investment management firm, can not only be beneficial but is actually necessary for high-net-worth and ultra-high-net-worth individuals. They often lack the time or skills to manage their assets on their own, and with their considerable wealth, it can be quite risky as well.

With an investment firm, they can confidently hand over the reins to their advisor and focus on other priorities in their life without ever having to worry about their assets. We suggest high-net-worth investors with $10 million or more in liquid assets to read our guide on financial advisors for financial success and serenity.

At Pillar Wealth Management, we are always trying our best to help our affluent clients reach this level of financial serenity. Our wealth managers and financial advisors have several decades of experience working with wealthy clients exclusively and catering to all their financial needs. Our services include investment and portfolio management, estate planning, risk management, tax planning, retirement planning, and much more. Fix a free meeting with our advisors today to get started on your investment management.

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.

You see, our goal is to only accept 17 new clients this year. Clients who have from $5 million to $500 million in liquid investable assets to entrust us with on a 100% fee basis. No commissions and no products for sale.