The Complete Guide to What We Do
For affluent individuals, managing their money and wealth is a big task. The more money one has, the higher is the risk of losing it in poor investment choices. This is usually where the top investment management firms come in. These companies can help preserve and grow investment portfolios of high net worth and ultra-high net worth individuals. Investment management is usually a part of a broader range of wealth management services. Wealth management is usually the more effective route for individuals with more than $10 million in liquid assets. If you’re one of those individuals, our unique guide can help you learn more about this practice and why it’s crucial.
Top investment management firms often serve only an exclusive range of clients. For example, Pillar Wealth Management offers wide-ranging wealth and investment advisory services exclusively for individuals with$5 million to $500 million in liquid assets. Similarly, you will find investment managers who will work with just about anyone. There’s nothing wrong with that – it’s all about priorities.
So, how do you recognize the best investment managers? Keep reading to find out.
Table of Contents
What Does an Investment Manager Do?
When you have complete knowledge of the market, answering this question becomes more complicated than it should be. Why? Because there is often a vast difference between what the top investment management firms do and the services provided by other investment managers. Identifying this difference is often tricky because not many of us know how to spot inexperienced investment managers who may not have the right kind of expertise to deal with a high net worth or ultra-high net worth investor.
Luckily, there are a fair few things you can look out for when choosing an investment manager, and we’ll tell you exactly what they are. However, let’s first answer the question, “what does an investment manager do?” by simply using the examples of one of thetop investment management firms.
Pillar Wealth Management experts consider investment management to be a personalized collection of services exclusively designed to help protect and grow the wealth of high net worth and ultra-high net worth individuals with $5 million to $500 million in liquid investment assets via smart asset allocations and risk minimizing strategies. We go in-depth into exploring your life goals and help you meet them financially without worrying about ever losing your money. Investment management is often a part of our overall wealth management service, where we entirely manage your portfolio and wealth according to your goals.
Now that you know a bit about investment management, let’s take a look at the qualifications you need to look for to find the top investment management firms. You can also contact us on our website and schedule a free chat.
How to Choose Top Investment Management Firms
Investment managers help you achieve your life goals while making sure you don’t have to worry about losing your liquid assets. If you’re an ultra-high net worth individual with $25 million to $500 million in liquid assets, our hardcover book on “The Art of Protecting Ultra-High Net Worth Portfolios and Estates – Strategies For Families Worth $25 Million To $500 Million” can help you understand how to best protect your wealth. If you are looking to hire an investment manager and are wondering,“What qualifications should I look for in an investment manager?” then here are some factors to look out for.
1. Relevant Experience and Track Record of Success
Experience is one of the most important factors you need to look for when searching for investment firms. And we’re not just talking about any experience in the investment domain here. The firm and its professionals should have relevant experience and a track record of success in dealing with clients of your financial caliber.
They need to realize that the same risky, aggressive investment tactics and packages they use for other clients won’t cut it for you. They also can’t assign any young advisors who are still learning their craft to you. You deserve to only work with the best in the business.
Since a lot of big firms have a large number of cases, we see a lot of situations where the money of high net worth and ultra-high net worth clients is redirected into pre-decided and pre-designed investment plans. It’s not that they don’t want what’s best for you; it’s just that they may not have the time available to create the personalized plan you deserve.
At Pillar Wealth Management, our experts have more than sixty years of combined experience in helping high net worth and ultra-high net worth clients with $5 million to $500 million in liquid assets. We can help preserve, grow, and manage your investments.
Why is our experience important? We realize that your priorities don’t revolve around earning a 10% annual return or making as many aggressive investments as possible. Not only are they not needed, but they’re unnecessarily risky as well.
Our experts work with you to ascertain your life goals and to figure out the lifestyle you want to live. We then use our experience to draft investment plans that facilitate those goals.
If you want to discuss your life goals and investment plans, schedule a free consultation with us through our website.
2. A Cohesive Plan to Invest Towards Your Goals Without Emotion
As we said earlier, the most important thing for you right now is to meet your life goals. Your priorities are about living the life you want without having to worry about losing your money.
Emotions and investments don’t go together. Investment managers who are unable to separate their emotions from their work will panic when things get rough. They’ll end up buying high and selling low by making rash decisions due to prevailing market conditions. It’s easy to see why emotions can often lead to major losses – especially when you’re dealing with millions of dollars.
Though most investment managers will promise to only invest without emotion, many of them are unable to follow through. Even though they want to keep emotions out of the equation, there can be a variety of reasons behind why this happens. Firstly, the investment management company may not have proper mechanisms that make sure they invest without emotions. Secondly, your investment manager may not have the relevant experience when it comes to dealing with these situations.
That’s why it’s so important to ask any potential investment managers about their practices for removing emotion from the investment equation. At Pillar Wealth Management, we exclusively work with a few clients that have $5 million to $500 million in liquid assets. We make sure our attention is entirely on investing in your life goals without any emotion.
How We Take Emotion Out of The Equation
We realize that protecting the wealth of individuals with $5 million to $500 million in liquid assets and reducing their costs is often just as vital as earning a healthy return. We firmly believe that this is the kind of shift in paradigm that maximizes portfolio performance. You can learn more about performance maximizing paradigm shifts by checking out our easy guide by clicking here.
So, how do we make sure to invest without emotion? Pillar Wealth Management uses an Efficient Frontier, 1000 Scenario Portfolio Stress tests and other components as part of a holistic process that removes emotions completely from the investment equation.
We test your investment portfolio against a thousand different economic scenarios, including the worst possible cases like multiple economic downturns, natural disasters, and more. We ensure that your portfolio isin the confidence level of 75% to 90%, where it EXCEEDS your goals in at least 75% to 90% of the scenarios.
Investing without emotions is the hallmark of top investment management firms. You can learn more about the practices of successful and unsuccessful financial advisors throughour ultimate guide by clicking here.
3. Asset Allocation That Minimizes Risk
Everyone realizes that risk minimization plays a huge role in how successful your investment portfolio can be. However, many investment managers make the mistake of thinking that diversification is enough to mitigate risks.
Of course, diversification matters. But it isn’t really the right concept to follow. Your portfolio can be diversified on paper yet still be at high risk. For example, your investments could be spread out among 30 different tech firms’ stocks, which would technically make them “diversified.” However, if the tech industry suffers a collective disaster (like the bursting of the dot-com bubble), you will be at risk of incurring severe losses.
We believe asset allocation matters a lot more than just diversification. Optimizing your investment ratios in equities, bonds and cash can help you navigate economic downturns a lot better and ride the wave of booms to earn returns.
No one can claim that a healthy asset allocation will prevent you from losing money during poor economic circumstances. However, it will reduce the impact on your portfolio, where you could lose only $5 million instead of around $15 million. None of the top investment management firms can protect you 100% from the risk of loss, but it’s essential to have an allocation that minimizes any potential losses.
At Pillar Wealth Management, we ensure that you always have a healthy asset allocation that both maximizes portfolio performance and minimizes the risk of loss. If you wish to learn more about how we optimize performance, check out our guide here.
4. Fiduciary Duty
This is perhaps the most important qualification your investment manager needs to have. Fiduciary duty refers to an obligation that your investment manager will only act in your best interests.
For example, all wealth and investment managers atPillar Wealth Management are Registered Investment Advisors (RIA) certified by the Securities Exchange Commission.When our advisors gain this certification, they have to agree to the Advisors Act of 1940.
This law compels them to always act in your best interests when advising you to make investments or when managing your portfolio on your behalf. We are also a fee-only advisor firm that does not earn any commissions or product-based compensations on any investments. If an investment manager does this, it can be a potential conflict of interest since they will be more inclined to make you invest in those products.
Non-fiduciary managers are not evil. They want to do what is best for their clients, too. However, they aren’t always able to put your needs first because of the other interests they have to deal with, such as those of their employers.
If you want to know what it’s like to work with fiduciary RIA investment advisors who care about protecting and growing your wealth, head over to our website and schedule a free chat with us.
How do Investment Managers Get Paid?
This is an important question because you deserve to know where your money is going and the potential expenses you incur. The top investment management firms will usually be fee-only services that do not make their money in any other way than a set fee.
For example, Pillar Wealth Management only charges an annual fee that is a percentage of your assets as payment for our services. We do not earn money from any commissions, spreads, or margins. We also make sure that you’re aware of any potential costs you might incur in the whole process.You will have no doubts about where your money is going, and there will be no hidden costs.
We realize that costs and fees can be a major source of income loss for high net worth investors with more than $10 million in liquid assets. If you’re someone with $10 million or more in assets, check out our special guide for more information on how you can minimize your costs.
Always remember that fees and costs are two very different things. Fees are charged by almost every investment management firm, but you also need to be made aware of the potential costs of investing.
Some of the most common costs we see associated with investment management include:
- Commissions paid to money managers
- Bond sale spreads
- Internal expenses
We aren’t saying that you shouldn’t incur ANY of these costs because that is impossible. The point is that many of these costs can be avoided or minimized with smart money management. A fiduciary advisor, like Pillar Wealth Management, will always work to reduce your costs wherever possible.
What is the Best Investment Management Firm?
The answer to this question will depend a lot on your needs and future goals. However, you can use the tips mentioned in this article to narrow down and separate the top investment management firms from the rest. Once you’ve done that, you need to explore how well each of them can help you protect your wealth and reach your goals.
At Pillar Wealth Management, our experts will study everything about your life and manage your investments in a way that enables you to live the life you want. If you’re an individual with $5 million to $500 million in liquid assets, visit our website to book a free consultation today and learn how we can help you achieve financial serenity.