9 Reasons Why Even Those with High Net Worth Need Portfolio Management and Financial Planning
The surprising truth is, even people with ultra-high net worth need portfolio management and financial planning, and this is why. Without these services, just like everyone else, even someone with $100 million can easily see their greatest aspirations, goals, and dreams go unrealized. There’s nothing more tragic than a dream unfulfilled that was within your grasp. And most of the time, fulfilling a dream requires money.
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.
In this article, you’re going to meet a couple of high-net-worth folks who needed portfolio management and financial planning. As you read, keep this in mind:
It’s one thing to wish you could do or accomplish some great task or venture, knowing it will probably never happen because you don’t have the money. This is how many people have to live. It’s quite another to actually have the money that makes it possible, but then mismanage it and fail to capitalize on what you could have accomplished.
And whether you end up working with us or someone else for your portfolio management needs, you want to pick the very best advisors for your team of professionals. That’s why we strongly recommend that everyone get our free guide, The Ultimate Guide for Choosing the Best Financial Advisor for Investors with $10 Million – $500 Million Liquid Assets.
If you have $5 million, $10 million, or even $200+ in liquid investable assets, we’re talking about you.
Consider your biggest and most deeply held dreams. The things you hardly tell anyone. Could be starting a business, investing in scientific research, funding startups, launching a foundation, starting a school, making a film, buying a plane, and learning to fly it. Could be a hundred other things that cost more money than the vast majority of people have.
Having more enables you to do more.
But without portfolio management and planning, it’s possible that none of it will happen.
We get calls from high net worth investors and families all the time who tell us the things they want to do with their lives. Over and over, after discussing it, they realize that to achieve everything they want out of life, they will need expert portfolio management combined with smart financial planning. Yes – even callers with over $100 million.
Why do these people call us? Because Pillar Wealth Management works exclusively with high net worth individuals who have between $5 million and $500 million in liquid net worth, and who want to get the most out of the life their wealth makes possible.
If you want to see how 100% customized and personalized portfolio management and financial planning looks and feels, try us out with a free and quick introductory call.
Table of Contents
Portfolio Management: Portfolio Management Understanding and Importance
Here are 9 ways ultra-high net worth clients will benefit greatly from portfolio management and planning with a fiduciary financial advisor, wealth manager, or project manager.
1.You’ll Be Done Working Longer than Normal
One of the great benefits of having great wealth is that you can stop working earlier than most people. It is not unusual for ultra-high net worth clients to leave their traditional work in their 50s or even their 40s. In rare cases, some even stop working in their 30s.
Suppose you like the idea of stopping work at age 45. You’ve just finalized that last big payday you were working for and have $50 million in net worth funds. Hard to imagine that you’d ever need to worry about portfolio management or financial planning in that situation. You feel like you’re set for life.
You very well could live 45 or more years. Now, if all you plan to do is sit around watching movies for 45 years, you’ll probably be okay with that concepts.
But if you’re like the vast majority of people with a high net worth that we talk to, that’s not how you want to live. Again, consider the list of dreams and goals mentioned earlier.
Starting a foundation that will accomplish something for the long term will require many millions of startup money. Funding a business startup, traveling the world, donate to an NGO organization, buying a yacht, becoming a person of influence in philanthropy, politics, business – all these things will require time and money. Things you have plenty of if you stop working early!
If you have kids, you’re also going to develop a desire to put your money to work for generations. You’ll want to preserve it for long after you’re gone. You’ll want to balance your desired lifestyle with the responsibility of managing your portfolio and investments.
And for many with high net worth, you might just love working. And while your original job might be finished, you’re going to find something else, some other passion, vocation, or ambition to pursue that may not generate seven or eight figures in revenue, but that matters just as much.
But with an unpredictable stock market and other life events that you don’t foresee, $50 million can very easily be gone in 10-20 years. If you are serious about your goals and dreams, you will need portfolio management that supports your financial planning decisions.
One client came to us in this type of situation. They were married and in their 40s and want to retire with about $75 million in liquid net worth. They didn’t think they needed financial planning and thought they could consent to handle the management of their portfolio on their own.
But after we tallied up their big dreams and goals – a long-term financial safety valve, becoming a venture capitalist investing $5 million per year in various businesses, a vacation home, and a few other high-ticket items, they wondered if $75 million might be enough.
We ran their plan through our proprietary wealth management portfolio planning process, and to their great surprise, their plan failed. This is not uncommon. To be clear, “failed” means there was too high a probability that they would run out of money before they died, and we as fiduciaries could not implement their plan as is. Changes had to be made as to risk management.
Those changes are what financial planning and portfolio management are all about. And this was a couple retiring in their mid-40s with $75 million.
Think you’re really that different?
2.Unplanned Major Expenses
Things come up that you simply can’t imagine. There could be a major medical situation that arises, such as long-term care that lasts for ten or more years or expensive surgery not covered by insurance. You can get sued, especially if you owned or still own a business.
Many unexpected situations can derail the best-laid plans and cost you a fortune.
Ultra-high net worth financial planning anticipates that possibility and prepares for it using a data-driven, non-emotional project portfolio management process.
3.Pursuing a Long-Held Dream
We’ve hit this one already but it bears repeating. Some dreams are big and grand, but also expensive. Like running for office. Or climbing the 20 highest mountains in the world. Or inventing cold fusion.
At Pillar Wealth Management, we want you to pursue your dreams to the fullest! We are extremely passionate about empowering you to use your money to live the life you desire. With smart financial planning and portfolio management, you can pursue your dreams knowing you are never overstepping your long-term financial security.
Schedule a quick introductory call to see how we help affluent families and investors pursue their dreams.
4.Market Volatility and Bad Timing
Market volatility is one thing, and with good investment management like what Pillar’s team of expert wealth managers delivers for all our clients, you can get through it. But market volatility at the worst possible time can create a perfect storm.
We had one person call our office who owns $200 million in commercial real estate in addition to $10 million in stock options with a former employer, besides her other assets. Sounds pretty secure right?
Until Covid decimated the commercial real estate industry. Given enough time, she could hopefully ride that out. But suppose she can’t. Or suppose something similar happens ten years from now, and at the same time her company stock loses 90% of its value because it gets rendered obsolete by new technology. Remember Kodak? This can happen to anyone.
Suddenly, that $200 million could be worth $50 million and she has to liquidate it, pay off the debt, and be left with very little.
Most wealth is not as secure as people believe it is. But with the highly advanced and proprietary portfolio management process developed by Pillar Wealth Management’s portfolio manager, it is possible to truly secure your future. Get secrets to improving investment performance with this free guide
5.Your Values and Priorities Change
Back to the couple retiring in their 40s. 25 years from now, what they care about will likely be very different from what they care about today. What if they decide to help 10 distant relatives attend college? What if they want to go big and open their own charter or private school? What if they start attending a church and it needs a new building while they’re in their 70s, and they decide to pay for the entire building?
Might seem silly now, but most of us don’t believe, act, or feel the same about what matters in life at 75 as we do at 45.
With portfolio management that adapts to your changing values, you can ensure your wealth sustains your desired lifestyle and objectives now while also providing future flexibility to pursue dreams and desires that you aren’t even thinking about right now, but that will matter greatly to you later.
At age 65, that caller with the $200 million in commercial real estate had no idea what to do with her life. No goals, no plans. Just sitting on all this money but doing nothing with it.
What’s the point of that?
Even though she has a high net worth, financial planning would help her in several tasks:
– Figure out her goals and what matters to her
– Create a plan, projects, or some concepts to pursue and achieve them
– Plan for her own financial security and future standards
– Create a tax plan to avoid losing tons to estate taxes (more in a bit)
– Start living a fuller life!
Just like your values and priorities can shift, so can how you think about money and wealth. For the best possible portfolio management, performance, and security, there are 5 specific shifts you need to make – everyone does. See 5 critical shifts for maximizing portfolio growth for individuals and families with $5 million to $500 million.
6.You May Be on the Hook for Massive Estate Taxes
With $200 million in real estate and $10 million in company stock, if this caller were to die, her heirs would be forced to pay tens of millions in federal estate taxes. If she lived in certain states, she would owe similar sums at the state level, or her heirs might owe inheritance taxes (or both estate and inheritance tax if she and the heirs all live in Maryland – not a good place to die wealthy).
But this caller has just $30 million in liquid net worth, not counting the stock options. Selling the stock options incurs additional taxes. That $30 million will not be enough to pay for the estate taxes that will be owed.
Now, imagine she dies during a recession when commercial real estate has dropped in value. Her heirs could end up actually suffering financial harm, forced to sell off depreciated real estate just to pay off the estate taxes, in addition to any remaining debt still owed.
In other words – a horrible situation considering how secure $200 million used to seem.
This is one of the biggest reasons why even those with ultra-high net worth need more than just portfolio management from a robot. It is painful to watch them suffer needless losses, especially to something as avoidable as estate taxes. Schedule a quick call to find out how we can help with tax minimization.
7.Family Dysfunction or Breakdown
This is another huge problem, and it’s one of the things money can’t protect you from no matter how much you have. Jeff Bezos got divorced and watched billions go out the door, just like that. Of course, he can afford it. But if you have $50 million and lost half of it to a divorce, how secure would you feel about your future?
Troubled kids, troubled grandkids, troubled nephews, nieces, cousins, or troubled elderly parents for that matter – relatives can wreak havoc on your finances if they run into trouble of various types.
Going through these situations isn’t just emotionally stressful because of the strain on the relationship. It also interferes with your dreams, goals, and desires, and how you were planning to use your wealth. Not as easy as making cookies or as beautiful as the ads on TV indeed.
But with smart financial planning combined with data-driven, project portfolio management tools, expert portfolio management, and accurate resource allocation you can protect your wealth and secure your future from family situations that might seem like they could never happen. But who knows what will happen 10, 20, 30 years from now? If you want to gain the fastest way, the solution is by using the service from portfolio project managers. A portfolio project manager will consent to provide the best services in several subject matter experts in portfolio management services such as resource allocation, decision-makers, use cases to decide the strategic objectives, investment decisions, company strategy identification, target allocation, project portfolio managers, project delivery, and many more.
8.No Sense of Direction for Life
You saw one example of this earlier with the real estate owner. But we have had people as young as 30 call our office looking for wealth management help. These are young business owners who have done very well for themselves, very quickly.
But now, they’re wondering what’s next. They aren’t thinking about retirement. But they have a huge portion of their lives still ahead of them and don’t have any idea how to even anticipate what lies ahead of the bonds. None of us do.
This is the whole point of financial planning. And even if you have $100 million as your resources, especially if you’re under 50, there are so many directions your life can go. Expert portfolio management, tailored to those with ultra-high net worth, can ensure your wealth goes with you all the way and you can achieve your financial goals in the easiest way to get the highest return.
Financial planning also helps you with the essential step of figuring out what you actually want to do with your life and take a role in your decision-making planner. These conversations you will have with a high net worth wealth manager will be life-defining. After having these conversations, you’ll feel different about your life in a profound way. You’ll have purpose, definition, intention. You’ll have a plan. You’ll have something to live for and devote your time and energy toward. You’ll have a sense of direction for your life.
9.A Perfect Storm
You’ve seen eight reasons why even the wealthy need portfolio management and financial planning. But just imagine a multitude of these reasons all becoming relevant in the same period of time.
Let’s say you stop working at 50. Then your mother-in-law develops an expensive medical condition ten years later. The next year, the market collapses and enters into a decade of mediocrity as we saw in the 2000s. Meanwhile, you were hoping to write and publish a book, but one of your kids ends up in rehab.
That’s a perfect storm. Could it happen? Stranger things certainly have. These are all fairly common occurrences, so it’s not that big a stretch to imagine two or more happening at the same time.
The point is – expert portfolio management for those with high net worth can protect your wealth from being lost in situations like this through the centralized management approach.
There are two ways to see what Pillar Wealth Management can do to help protect your wealth.
First, you can request a complimentary copy of our hardcover book, The Art of Protecting Ultra-High Net Worth Portfolios And Estates: Strategies for Families Worth $25 Million to $500 Million
Second, you can schedule a free call with one of our founders and wealth management experts.
We feel our main job is to help our clients make educated and smart decisions that feel right to them; which actually includes not doing anything if that’s what feels right. We help our clients figure out and provide valid information about what they really want to do with their money, help them to manage the project portfolios, project selection, rebalancing (rebalancing their potentials and goals), handle the project management processes, show them options on how to accomplish that interest, and then let them pick the approach and strategic objectives that feel right to them. We also provide information about the time horizon, risk tolerance to make you able to understand the situation and its best solution.
Portfolio Management: Are you really need it?
based on the nine reasons we mentioned above, you can see the importance of portfolio management for wealthy families like yours.
Besides, when you are working with a portfolio manager, you will learn about PPM (Project Portfolio Management).
Your portfolio manager will use this approach in providing portfolio management services. In fact, you can also consult about your business such as product development or any other business analysis.
Portfolio Management: Portfolio management is needed when you seek assistance in handling your wealth.
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