Ultra High Net Worth Wealth Management Firms
by Hutch Ashoo and Chris Snyder · Updated November 2, 2021 · 8 min read ✦
4 Disturbing Reasons Why the ‘Best’ Ultra High Net Worth Wealth Management Firms Won’t Deliver the Investment Performance You Expect
Being wowed by headlines about the billions or even trillions in assets under management at the biggest and supposedly best wealth management firms is easy to do. However, as you’re about to see, when looking for ultra high net worth wealth management firms, one might be wise to steer clear of the most well-known companies. For much more details you can download the ultimate guide for investors with $10+ million liquid investable portfolios here.
This article presents four reasons you should strongly consider before engaging large wealth management firms. But there are actually 7 reasons in total that you should be aware of, and we explore them all in our signature written work, 7 Secrets to High Net Worth Investment Management, Estate, Tax, and Financial Planning. You can request your free copy of the book right here. You’ll find the seven reasons to avoid large wealth management firms in the 4th section of the book.
The best ultra high net worth wealth management firms:
Goldman Sachs Wealth Management is part of the well-known Goldman Sachs Wall Street bank. It is currently known for its robo advisor Marcus as investment advice begins to be popularized online, eliminating the need for help from a human financial advisor. For more affluent individuals with large amounts of money to invest, Goldman Sachs offers financial advisory professionals that are highly trained in asset management and providing investment advice for a fee.
JP Morgan Chase offers investment advisory services as well as banking through JP Morgan Private Bank, which caters to wealthy individuals and enterprises around the world. It began as the Manhattan Company in 1799.
JP Morgan has $3.7 trillion in assets managed by 4,000 advisors in 3,500 branches, which it manages for its millions of clients. The company offers financial services and products that span the entire spectrum of asset classes.
Northern Trust Asset Management was founded in 1971 and is based in Chicago, IL, having started as a bank in 1889.
Northern Trust provides wealth management to the most successful businesses and individuals in the world. Its products span the entire spectrum of financial advisory services through cutting-edge technology and a team of expert financial professionals.
Northern Trust has been voted Best Private Bank for Family Office Services (Global Finance Magazine, 2020) and one of the best companies for multi-cultural women (Saramount, 2022).
Wells Fargo wealth management offers a 1:1 relationship with a dedicated financial advisor who is expertly trained in all aspects of financial planning for individuals, families, corporations, foundations, etc.
Wells Fargo Bank is committed to working on resolving the big social issues of today through its ESG (environment, social, and governance) policies and activities. The bank does report regularly on its ESG commitments, in particular, activities related to lending and renewable energy financing to mitigate climate change, with targets for the bank’s energy portfolios.
Merrill Lynch wealth management is owned by Bank of America and has over $1 trillion in assets under management. Merrill Lynch was founded in 1914, acquired by Bank of America in 2009, and is now known as an investment bank. The company serves approximately 47 million individuals and businesses, with 4,700 retail locations and offices in many countries around the globe.
At Merrill Lynch, wealth management fees range from 3.1% for accounts below $1 million to 1.5% for accounts worth over $25 million. Its online business is called Merrill Edge, where discounted investment services are available.
What you’re about to see is not a secret. This information is readily available to anyone who goes and looks for it. The problem is, most people aren’t looking. They’re taking what the financial and mainstream media tells them as truth. All the while, they’re missing the underlying risks and costs of entrusting their wealth to large ultra high net worth wealth management firms and big banks. This article presents four reasons why you should strongly consider avoiding large wealth management firms.
But there are actually more than four, and we explore seven of them in our signature written work, 7 Secrets to High Net Worth Investment Management, Estate, Tax and Financial Planning. You can get your free copy right here. You’ll find the seven reasons to avoid large wealth management firms in the 4th section of the book, which will also give you insights into ultra high net worth wealth management firms.
Pillar Wealth has handled financial portfolios in the United States ranging from $5 million up to $500 million for the past thirty years. We have devoted our careers to creating custom financial capital solutions to meet the needs of each family and ensure financial stability. Click here to book a free consultation with us and learn more about ultra high net worth wealth management firms.
Still, some wealthy clients feel more comfortable with the big firms grinding out bigger numbers. Have you been wondering if it’s in your family’s best interest to roll with a larger firm or reach out to a smaller firm offering more personalized service?
When you’re choosing the right financial advisor to manage your assets, you have to ask yourself honestly, is bigger necessarily better?
When it comes to high net worth individuals, who have far more to lose (and to gain) based on which ultra high net worth wealth management firms they choose to work with, great consideration should be given in weighing the importance of the size of the firm. To learn more about this, click here to read our guide on how to choose a financial advisor that can help you manage assets between $5 million to $500 million. Consider these four reasons why larger ultra high net worth wealth management firms aren’t necessarily your best option in seeking investment help.
Ultra-high-net-worth wealth management consists of wealth management services for ultra-high-net-worth individuals, that is, individuals with a net worth of at least $30 million.
In 2022, Morgan Stanley Private Wealth Management is ranked as the biggest wealth management firm, with approximately $5 trillion in assets under management. The firm held this top ranking in 2021.
A generally accepted definition of an ultra-high-net-worth individual is someone who holds assets worth at least $30 million. This group of individuals holds a large portion of the world's wealth.
A high-net-worth individual is someone who holds assets worth at least $1 million but less that $30 million, while an ultra-high-net-worth individual's assets are worth over $30 million.
According to Forbes, the top five are Jeff Erdmann at Merrill, Brian Pfeifler at Morgan Stanley, Mark Curtis at Graystone Consulting, and Christopher Errico at UBS, and Greg Vaughn at Morgan Stanley.
According to advratings.com, the top firms are UBS Global Wealth Management, Edward Jones, Credit Suisse, Morgan Stanley Wealth Management, and Bank of America GWIM.
In wealth management, an ultra-high net worth individual is someone who owns assets, including cash, stocks and other investment vehicles, real estate, and other valuables, worth at least $30 million.
An ultra-high net worth portfolio is an investment portfolio worth at least $30 million. It consists of assets such as stock and bonds, index funds, ETFs, bank accounts, and insurance policies.
For several years, JP Morgan has been considered the best private bank in the world, particularly due to its Chase arm and aggressive marketing. It has over $3 trillion in assets.
According to benzinga.com, the best traditional wealth management firm is Vanguard PAS, at a cost of 0.030% of assets under management, with advisors who are fiduciaries.
4 Reasons To Avoid Ultra High Net Worth Wealth Management Firms
1. Large Firms Can Obliterate Your Growth on Avoidable Taxes
As Forbes puts it, a wealth manager might think he’s performing exceptionally well with 15% gross returns, but new rules “could make that initial awe-inducing number closer to 3% after factoring in total management fees, fund expenses, and taxes.”
Costs and taxes like these can eat away at performance gains in far bigger chunks than investors might realize. These costs and taxes aren’t just chipping off fragments from your gains. They could be splitting them in half, or worse. Here’s a more in-depth look at 6 hidden and avoidable investment costs. You can also check out our guide on portfolio performance where we discuss the impact of these costs on your investment portfolio.
Are large ultra high net worth wealth management firms better than specialized ones at tax minimization?
In all likelihood, they’re worse at it in part because they have such global staff (Morgan Stanley has 15,500 wealth managers). The chances are low that all of them operate at the high level required to stay on top of the ever-changing tax strategies needed to maximize growth and minimize losses for each of their clients.
In reality, only a fraction of them does.
Plus, ultra high net worth wealth management firms typically will have larger caseloads, and therefore less time to help you and come up with the unique scenarios facing each of their ultra-high net worth clients.
Which of their wealth advisors will you end up with? Or will you get switched around with all the inevitable turnover that also occurs at large ultra high net worth wealth management firms?
At a large company, investors have a greater chance of losing money to avoidable costs and taxes. It is harder to protect your wealth. To learn more about this, you may want to order a free hardcover copy of our book, 7 Secrets To High Net Worth Investment Management, Estate, Tax and Financial Planning – For Families With Liquid Investable Portfolios Between $10 Million and $500 Million, and learn more about ultra high net worth wealth management firms.
2. The Abundance of Wealth Managers Dilutes the Expertise
Expertise cannot exist across an entire industry. If you take the time to look, you can always have high-performers operating at levels exceeding those of the masses, within the same industry. The same holds true in ultra high net worth wealth management firms.
At the top, you have some of the best financial advisors and wealth managers that offer capital financial strategies and solutions for your business assets are at this level. They define and redefine wealth management, as the global and market picture continually evolves.
The larger group of less experienced wealth managers beneath them are followers. Doing what they’re told. Following pre-written sets of directions and procedures. Written by elite performers.
At the large ultra high new worth wealth management firms, you can find a handful of elite ultra high net worth wealth managers. But with tens of thousands of wealth managers on the global staff of the big firms, what are your chances of nabbing the diamond in the rough and optimizing your investment performance? In contrast, at specialized wealth management firms, the expert is also the owner. He or she is directly involved with each client portfolio. By not passing the work off to ‘employee advisors’, they are able to offer private advice for asset investment. They know about private information like their pets’ names and what colleges they went to.
Even more, the manager knows their clients’ business situation, mortgages, investment management performance, and short- and long-term financial goals and dreams. By having this kind of private information, they are able to provide a customized plan that looks unlike any other plan out there because it’s been so precisely aligned to that person’s needs.
Choosing a financial advisor who is invested in you and your family means you receive a private approach and advice, which may not happen with ultra high net worth wealth management firms. When your financial advisor understands and cares about your needs, they provide custom financial services as your solutions so you can improve your portfolio performance.
At large ultra high net worth wealth management firms, many ultra-high net worth individual investment plans look eerily and disturbingly similar. That’s because those plans don’t receive the customized attention they would have experienced at the more specialized ultra high net worth wealth management firms. That’s the inevitable result of having to ‘hire down,’ as the big firms must continually do to fill their wealth manager pipelines as demanded by constant growth.
The survey found that the financial advisory industry now employs more non-owner professionals than owners. ‘Employee advisor’ has taken over as the most common job title for workers at financial advisory firms. You don’t want someone learning on the job while managing your ultra high net worth portfolio. At the big ultra high net worth wealth management firms, the likelihood you’ll end up with such a person is much higher than at a specialized company. It’s a simple probability. If you are looking for information about ultra high net worth wealth management firms where you don’t have to worry about this, click here to arrange a free consultation with Pillar Wealth Management.
3. Assets Under Management (AUM) is a Misleading Indicator
Charles Schwab’s Investor Services (their wealth management division) saw net revenues increase by 14.6% in 2017 compared to 2016. Wells Fargo’s net revenues were up just 4.9% in the same period.
So is Schwab doing “better?” Well, yes, but not in the way you might think. According to Investopedia, revenue growth was due mostly to “increases in asset management and administration fees.”
In other words, they made more money, but that doesn’t mean you did.
Simply looking amount of assets under management, growth of revenue and income, and other indicators at various ultra high net worth wealth management firms don’t tell you what you really need to know.
For a deeper look at the seven warning signs that matter most when choosing ultra high net worth wealth management firms, see the 7 Secrets To High Net Worth Investment Management, Estate, Tax and Financial Planning – For Families With Liquid Investable Portfolios Between $10 Million and $500 Million.
We consider this fairly obvious information – bigger doesn’t mean best for you if you need help to protect your wealth. Revenue growth simply doesn’t tell the whole story, because you don’t know how much money is being made from fees, taxes, and other costs paid by their investors. To understand this better, click here to read our guide on the 7 secrets to high net worth investment management, estate, tax and financial planning that help investors achieve financial serenity, and learn more about ultra high net worth wealth management firms.
4. Large Firms Have Fewer Specialists
The idea of ‘one-stop shopping’ has proven wildly appealing at big box stores. But when it comes to ultra high net worth wealth management firms – one-stop investing is the last thing you want. Why?
Because as a wealthy person, the level of additional financial services you require exceeds that of the vast majority of other people. You require financial advisors who offer private advice and provide capital solutions and strategies for your wealth planning.
Further, even though you share financial status with another wealthy family, it doesn’t mean you want a cookie-cutter approach to wealth management. Pillar Wealth literally wrote the book on how to protect your Ultra-High Net Worth status. This book can actually help you in protecting your asset investment.
If you are looking for custom wealth management planning, then you are in good hands. Our advisors provide personalized investment strategies and financial planning. Click here to talk to one of our wealth managers in a free consultation session and learn more about ultra high net worth wealth management firms.
You don’t just need another estate planning attorney. You require someone who has sat through dozens of high net worth estate scenarios and know what to offer to his clients.
You don’t require another estate planning services. You need private services from someone who has handled properties for celebrities and moguls so you know that your advisors manage your portfolio just like they manage top priority clients.
You don’t just need another tax accountant. You need someone the courts call as the expert witness in the cases making headlines. Actually, you need someone who turns down the courts because she’s too busy working with more important clients – like you.
The point is, none of this elite-level, ‘category-of-one’ experts work at a large bank or at ultra high net worth wealth management firms. They operate their own specialized companies. Why? Because they are specialists. No estate planning elite specialist works at Wells Fargo. So yes, while big banks and big ultra high new worth wealth management firms may offer these other financial services as part of their high net worth wealth management packages, those financial services are not represented by the best of the best in those respective fields.
You will not find the top team all in one place.
You will find the best team only by searching for the most experienced and specialized experts running their own elite-level, and smaller, firms.
And just as this is true with estate lawyers and accountants, it’s also true with wealth managers. Wouldn’t you rather work with a financial advisor who has your family’s best interests at heart?
If you are one of the high net worth investors with $10 million or more in investable assets, click here to read our guide on finding a financial advisor that prioritizes your goals above all else.
Want to Meet an Elite-Level Specialized Wealth Manager?
When you talk to Pillar, you’ll discover what this looks like at the elite level of wealth management. And if you have already come to a big bank or big ultra high new worth wealth management firms previously, what you’ll hear from us will give you a new insight into the actual private investment help for your high net worth family.
Check our website or related content below to find out what you’ve been missing.
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.
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