The Complete Guide to What We Do
Private Wealth Management is a financial advisory service catering to the financial needs of high net worth and ultra-high net worth individuals and families. A high net worth individual is someone with $1 million or more in liquid assets while an ultra-high net worth individual is someone with $30 million or more in liquid investible assets. Almost every wealth management firm like Bernstein Private Wealth Management will have a specific asset size that they will work with. For example, Pillar Wealth Management, a niche wealth management firm, works with clients who have $5 million to $500 million in liquid investible assets. And by the way, we encourage you to check out this guide on choosing the best financial advisor for individuals with $10 million or more in liquid assets.
Bernstein Wealth Management traces its roots back to 1967 when the firm was founded as Sanford Bernstein. In the year 2000, the firm was acquired by Alliance Capital and it becameAllianceBernstein. Bernstein Private Wealth Management today manages around $487 billion in assets and has 3,500 employees. The firm has a presence across the US, North and South America, Europe, Asia, and Australia. Whether to pick a large wealth management firm with a global presence or go with a boutique firm that can offer a high degree of customization is a personal choice.
If you are confused about which way to go and need more insights, then you have come to the right place. In this guide, we will look at the services offered by Bernstein, explore Bernstein client types and minimum account sizes, look at the fees under Bernstein, and discuss what opening an account with Bernstein or any other wealth management firm really entails. We hope that this information will help you make an informed decision.
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Services Offered by Bernstein
Most wealth management firms offer a variety of services under one roof. A wealth manager is someone who deals with all aspects of a high net worth person’s financial life. He/she is supposed to be the go-to person for any financial issues faced by a high net worth or ultra-high net worth individual. So whether it is Bernstein Private Wealth Management or Pillar Wealth Management, a firm catering to clients with $5 million to $500 million in investible assets, you will see a list of services that cover a variety of areas in personal finance. Services offered by Bernstein include tax planning, retirement, portfolio management, philanthropy planning, estate planning, risk management and insurance, sale of a business, employee stock options, art valuation, etc. Feel free to reach out to Pillar Wealth Management to know about its services.
The idea of having multiple services under one roof is to save the client time and effort. Imagine if a high net worth individual has to consult one person for taxes, another for investment management, and someone else for other purposes. Just scheduling meetings and driving from one place to another will take up so much time. Additionally, the decision-making will not be holistic. The investment professional may not know what the tax consultant is thinking and the insurance expert may not know how a particular insurance policy will fit with the broad life goals of the client. If one person handles all the areas of finance for an individual, then he/she knows the impact of every decision on all those aspects. So, the decision-making is centralized and coherent. You can read more about the benefits of wealth management in this guide on choosing the best financial advisor for individuals with $5 million to $500 million in liquid assets.
Bernstein Client Types and Minimum Account Sizes
As mentioned above, every wealth management firm will have a minimum account size that it works with. Wealth management is financial advisory for affluent clients and the services are targeted towards a specific client type. Bernstein client types and minimum account sizes are also somewhat clear. It is believed that Bernstein Private Wealth Management requires at least $1 million in liquid assets. It is also understood that Bernstein treats portfolios of $25 million or more as institutional investor portfolios. There is a different business division within AllianceBernstein that handles such portfolios.
Given these account sizes, it is clear that clients with deep pockets will approach Bernstein Private Wealth Management for advisory services. Bernstein clients include high net worth and ultra-high net worth individuals, multi-generation families, trusts, estates, family offices, and endowments. You can read about the kinds of clients that seek the services of wealth management in this bookcalled The Ultimate Guide to Choosing the Best Financial Advisor: For Investors With $5 Million to $500 Million in Liquid Assets.
Checking the account size requirement and the client type is important if you are looking for top wealth advisors to work with. It gives you an idea as to whether you are eligible to work with a particular wealth manager. It also gives you an idea of the kind of experience that a wealth manager has and whether that experience is relevant to you. For example, working with someone who wants to sell a $1 million property is very different from working with someone who wants to sell a $50 million property. Handling investment decisions of a $10 million portfolio is different from handling decisions of a $100 million portfolio. Feel free to start a conversation with Pillar Wealth Management to understand the expertise that your situation requires.
Fees Under Bernstein
Fees under Bernstein resemble a fee-only model. The firm charges a fixed percentage of assets under management. This percentage drops as the size of the assets increases. Some cases involve a fixed base fee and a performance-based fee. However, everything is pre-determined and transparent at the beginning. A performance-based fee looks justified during good years when the portfolio performs really strong. But, what happens when you have a couple of bad years? The performance fee, when seen over a long time like 10 or 15 years, probably doesn’t make sense. That additional cost could instead have compounded instead of getting sacrificed forever. You can read more about such avoidable investment management costs in this guide on improving portfolio performance for investors with $5 million to $500 million in liquid investible assets.
Most wealth management firms, including Bernstein Private Wealth Management, follow two approaches when it comes to fees. One is a fee-based approach. The other one is a fee-only approach. A fee-only model involves just fees. The fee is calculated as a percentage of assets under management, as an hourly rate times the number of hours spent of various tasks, or as a fixed amount that gets released when a milestone is achieved.
A fee-based model is one where commissions along with a fixed fee are involved. The concern with having commissions as part of the compensation structure is that the commissions can misalign the financial incentives of the wealth manager and the best interests of the client. For example, a wealth manager may “push” a client to buy a certain insurance policy or invest in a certain mutual fund when the client does not really need the insurance policy or the mutual fund investment. Get in touch with Hutch Ashoo to know why a fee-only model works.
Opening an Account With Bernstein
Opening an account with Bernstein may involve getting in touch with the firm and working with a designated wealth manager. In fact, before you open an account with Bernstein private wealth management or any wealth management firm, it is always a good idea to first speak with the wealth manager that you will be working with. But before you do any of that, you have to first go through the process of finding a top wealth manager.
To do that, the first thing you need to do is look inwards. Ask yourself why you want to work with a wealth manager. What is it that you want out of the relationship? Are there any specific areas in your financial life where you could use some professional advice? We recommend that you check out this short guide on critical shifts needed to maximize portfolio performance for investors with $5 million to $500 million in liquid investible assets.
Once you know what you are looking for, the screening work gets that much easier. You can search online for various wealth managers and start screening them based on your priorities. If they do not offer any particular service that is important to you, then you move on to the next option. After you shortlist a few promising options, speak to each wealth manager individually. Get to know the person and whether your thinking and working style matches with theirs. After all, you will have to trust that person with your hard-earned money.
You can also ask your relatives, friends, and business colleagues about any top wealth managers who they know. You may also go ahead and schedule a free consultation with Pillar Wealth Management to explore its white-glove personalized services.
Bernstein Private Wealth Management – Other Factors To Consider
Before you choose a particular wealth manager, we recommend that you think about a few key aspects. Firstly, it may be a good idea to discuss whether a prospective wealth manager can differentiate between investment costs and fees properly. They are two very different things. Fees are what the wealth manager charges in return for his/her services. Investment costs are line items like capital gains taxes, brokerage charges, fund expense ratios, and other costs related to making investments.
Many wealth managers tend to focus heavily on gross investment returns. They design their investment strategies around the idea that it will earn a superior gross return. However, what if that strategy involves trading securities frequently that result in short-term capital gains taxes for the client? What if the investments include high-risk expensive mutual funds that marginally beat the benchmark? Once all the costs are deducted, the returns that the client receives in his/her bank account are the net returns. If similar net returns can be achieved by simply investing in a passive fund for a long period of time, then the return per unit of stress (or risk) is a lot better with a passive strategy. So, net returns are always important.
Secondly, it helps if a wealth manager is a registered fiduciary. An investment advisor can act as a fiduciary when he/she registers with the SEC or the state regulator. Being a fiduciary requires the advisor to always act in the best interests of the client. It helps boost trust between the client and the wealth manager. Wealth management can be successful only when the client has full confidence in the decisions that the wealth manager takes for the client’s portfolio.Reach out to Pillar Wealth Management to discuss the attributes of a successful wealth management firm.
What Makes Pillar Wealth Management A Sought-After Firm?
Pillar Wealth Management follows the philosophy of financial serenity. It means that the clients go through the journey of achieving all their financial goals in a stress-free manner. They can sleep easy at night knowing that their portfolios are stress-tested every quarter for random events that have the potential to pose challenges.
Pillar Wealth Management also positions itself as a boutique firm with an optimal size that allows high customization and personalization. Its high focus on every individual client is possible because it takes in a limited number of clients. This year, the firm is accepting only 17 new clients. Pillar Wealth Management is also one of the few firms with a dedicated goal towards saving investment costs. It aims to save the client $100,000 for every $10 million in assets that the client brings in. Pillar does this through better performance, lower taxes, lower expenses, and lower volatility.
Hutch Ashoo and Christopher Snyder are the expert founders of independent, fee-only, and fiduciary wealth management firm Pillar Wealth Management. If you would like to speak with them or simply ask any questions about how custom and trusted wealth management advice is offered to highnet worth individuals with $5 million to $500 million in investible assets, then feel free to start a conversation.