Best Wealth Manager
Are you confused about whether to work with a financial advisor or a wealth manager? Do you want to know why the best wealth manager can save you millions? What is wealth management? What are the strategies of a wealth manager? We will answer all these questions in this guide on wealth management. We will also look at a wealth management example. But before we do that, let us remind you that you can download this complimentary book on finding the best advisors for those who have $10 million or more in liquid investible assets.
STRATEGIES FOR FAMILIES WORTH $5 MILLION TO $500 MILLION
7 Secrets To High Net Worth Investment Management, Estate, Tax and Financial Planning
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.
Wealth management finds mentions in the news these days. A lot of the headlines are about how wealth managers are in demand in places like China, India, and other emerging economies. It seems as if there is a direct connection between wealth generation and wealth management. As newer millionaires and billionaires are minted every year in these growth economies, the demand for wealth management also seems to grow. It is as if more money equals more decision-making and more complexity.
Things are not very different in the US. Wealth Management is a well-established industry in the country. There are wealth management firms spread out across the country. You can probably find a few close to your zip code as well. Wealth management can help address all the financial decisions and issues facing high net worth individuals. The best wealth managers not only help protect wealth, but also set up their clients to achieve all of their financial goals in life. It is why Pillar Wealth Manager is one of the best in USA. It manages wealth for individuals with $5 million to $500 million in liquid assets.
If you are considering hiring the services of a wealth manager and have been researching topics like financial planning, retirement planning, or any other personal finance topics that you need help with, then this article will help you gain deeper insight into wealth management. You can gain better clarity on whether wealth management is right for you.
10 Top Investment Management Companies for 2023
As of January 2022, BlackRock, Inc. had $10 trillion in assets under management. The company was founded in 1988 as an institutional asset manager, with its headquarters in New York City.
BlackRock is the world’s largest investment company, with a massive technology platform that manages over $20 trillion in assets. In 2020, the company was approved to trade in China.
BlackRock offers a wide variety of funds and asset classes. The company’s unified Aladdin platform offers risk analysis, extensive portfolio management, and trading and operations tools.
2. Vanguard Group
The Vanguard Group, Inc. is an investment company founded in 1975, with headquarters in Valley Forge, PA. It has about 18,000 employees and $7.2 trillion in assets under management.
Vanguard is the world’s largest provider of exchange-traded funds (ETFs) after BlackRock’s iShares and the largest provider of mutual funds. Vanguard has some of the best low-cost ETFs on the market.
3. Charles Schwab
Founded in 1971 and headquartered in Westlake, TX, the Charles Schwab Corporation is one of the largest investment companies in the world, with assets under management valued at $7.13 trillion in 2022. The company acquired TD Ameritrade in 2020. In June 2022, the company was ordered by the SEC to pay $187 million to settle its failure to disclose its robo-advisor’s hidden fees to clients.
The company’s online stock and ETF trades are commission-free.
4. Fidelity Investments
Fidelity Investments was founded in 1945. Its headquarters are in Boston, MA. The firm has approximately $4.5 trillion in assets under management, with revenues of $24 billion in 2021. It was the first major investment company to offer mutual funds to the public.
The company introduced its zero-expense-ratio mutual funds in 2018, along with four zero-expense-ratio equity funds.
5. JPMorgan Chase
JPMorgan Chase & Company is a multinational investment bank founded in 2000 and headquartered in NYC. It is the largest bank in the US and the owner of JP Morgan Chase Bank and JP Morgan Securities. The bank provides private banking and wealth management.
JPMorgan offers mutual funds, ETFs, retirement funds, and 529 funds. JPMorgan provides self-directed Investing, which allows the investor to make unlimited commission-free online trades through the company’s mobile app or at Chase.com.
Betterment’s investment advice is offered primarily over the internet. Betterment manages investment portfolios of exchange-traded funds (ETFs) and, in some cases, mutual funds (traditional securities) or digital assets (crypto). Betterment also offers retirement planning and cash management.
The minimum initial deposit is $10.
Betterment provides automated advice with access to financial planning experts through its Premium plan, which has a team of CFPs to offer advice through unlimited calls and emails. Betterment Premium requires a balance of at least $100,000 in traditional securities and crypto.
Betterment’s tools can help you figure out how much you need to save for retirement, and establish a savings plan.
Moneyfarm is an online investment advisor and one of the largest digital wealth management companies in Europe.
The company was founded in 2011 by Paolo Galvani and Giovanni Daprà. In 2018, it launched Sipp, a digital self-directed retirement fund.
Moneyfarm creates a portfolio based on the client’s desires and risk tolerance. The user builds an investor profile, choosing active or passive asset management, and chooses a product, which is a broad mix of cost-effective ETFs.
Moneyfarm’s investment committee will strategically rebalance the client’s portfolio. Investment consultants are available to chat on the web, the app, or by phone.
The investment fee is a flat monthly based on the amount invested. For example, the fee for investing £200,000 is £125.00 for the socially responsible portfolio and £123.33 for the classic (tier 0.45%), plus a fund fee of 0.20% and any brokerage fees.
The firm is partly owned by Allianz Asset Management.
Nutmeg is an online investment company based in London, UK, offering discretionary investment management, meaning it is not a trading platform. It invests primarily but not exclusively in ETFs, offering a variety of individual savings accounts (ISAs).
Nutmeg was founded in 2011 by Nick Hungerford and William Todd. The company has around 80,000 customers and £2 billion in assets under management.
The investment fee on £200,000 is approximately £1,500 yearly for a fully managed portfolio.
The firm is a subsidiary of JP Morgan.
SigFig was founded in 2006 as a startup that build a portfolio tracking tool. Today SigFig operates in the US, Canada, India, and Singapore with over 175 employees.
The minimum account balance at SigFig is $2,000. There is no annual fee for an account balance up to $10,000. With more than $10,000, the annual fee is 0.25%. Fees increase with a human advisor but decrease as investments grow.
Wealthsimple is a Canadian firm with over 3 million customers. It was founded in 2014 and is based in Toronto. In 2015, through the acquisition of Canadian ShareOwner Investments, Wealthsimple became an owner of a discount brokerage. The firm has over C$15 billion in assets under management.
Wealthsimple Invest is the company’s automated investing service. Customers can start trading with $1, including fractional shares investing. For $10/month, you can instantly trade up to $50,000, with no commissions and no fees on Canadian trades.
Wealthsimple offers Wealthsimple Trade as a stock and ETF trading mobile app; Wealthsimple Save, a high-interest savings account; and Wealthsimple Cash, a peer-to-peer cash transfer app.
For anyone who does not feel at ease with trading, has a complex financial situation, or isn’t sure they’ll have enough money to retire, hiring a wealth manager is worthwhile.
Some wealthy individuals are not interested in investing or are just too busy, so they have financial advisors and planners to help them manage their money.
If you’re unsure about how to grow and protect your wealth, or you wonder about maintaining your lifestyle during decades of retirement, you might need the help of a wealth manager.
The average advisory fee for wealth management is 1% of the value of the investment portfolio. This could be set at a flat monthly or yearly fee, which does not fluctuate with the value of the assets.
A Five Star Wealth Manager satisfies 10 criteria associated with wealth managers who provide quality services to their clients, including assets under management and client retention rate.
You can find a wealth manager by searching on the internet or asking around in your network. Do some research to identify what services you need, and talk to a few candidates before choosing one.
Some of the best wealth management is offered by firms such as Edward Jones, Vanguard Group, Bank of America, and Morgan Stanley.
The best bank for wealth management is Bank of America.
The biggest wealth managers are UBS, Bank of America, Credit Suisse, and JP Morgan.
You could get a recommendation from someone in your personal network. Otherwise, do some research online to find a firm that could meet your needs. Look at customer reviews and SEC filings, too.
What Is Wealth Management?
In order to understand wealth management, we first need to answer one basic question – What is wealth management? Wealth management is the process of addressing the financial needs of affluent individuals. There is a special emphasis on the word “affluent” because that is what separates wealth management from financial planning and general financial advisory.
Wealth management is indeed a form of financial advisory. But, it is a specific form of advisory positioned towards high and ultra-high net worth individuals. In fact, almost all wealth management firms will have a certain account size threshold that they work with. This threshold will be in millions of dollars in liquid and readily investible assets. Pillar Wealth Management works with individuals who have $5 million to $500 million in investible assets.
Wealth management can include financial advisory areas like retirement planning, estate planning, philanthropy, real estate advisory, legal services, personal finance, advice on mergers and acquisition deals, tax planning, accounting services, etc. Wealth management basically covers all parts of a high net worth individual’s financial life. You can read more about the different services in this Ultimate Guide to Choosing the Best Financial Advisor: For Investors With $5 Million to $500 Million in Liquid Assets.
With so many areas of personal finance involved, one logical question that comes to mind is whether multiple professionals will offer advice that will then be integrated into the decision making process? One of the big benefits of working with the best wealth manager is that the client has to deal with only one person. That saves a lot of time. It is possible that a wealth management firm may, at times, not have expertise in-house for a specific area of financial advisory. In such cases, the wealth manager should be able to bring in the expertise of outside professionals without disrupting the workflow with his/her client in any significant way. The idea of a wealth manager is to offer a one-stop-shop to the client for all his/her high net worth financial issues.
Wealth management is a paid service. Most wealth managers will earn a fee and/or commissions. Understanding this part also explains why wealth management is geared towards affluent clients. Take the pandemic-led market crash as an example. The S&P500 crashed almost 35% back in March 2020. If you had a portfolio of $10 million, you would have seen about $3.5 million (35%) wiped out. However, if you have a portfolio of $100,000, your portfolio would have taken a hit of $35,000. Clearly, the stakes are a lot higher for the larger portfolio. Schedule your free consultation with Hutch Ashoo at Pillar Wealth Management to discuss how high net worth portfolios can be protected from Black Swan events.
Plus, the more money one has, the more complex are the decisions. Imagine the difference between paying short-term capital gains tax vs long-term capital gains tax on the $10 million portfolio. The difference could be in millions when considered over a period of time. Similarly, affluent clients may have multiple properties, businesses, and succession planning issues to think about. Wealth management deals with all of these topics.
Wealth Management Example
Wealth management often looks at factors within a client’s control and simulates stress-tests for factors that are beyond the client’s control. The factors that are within a client’s control are the amount of savings, the amount of spending (lifestyle), the life goals that require money along with their timings, and the legacy that the client may want to leave behind.
One way to help you understand the value that wealth management adds to a high net worth individual’s financial life is through examples. While this article discusses two examples, you can read many more examples of wealth management in this complimentary guide on selecting the best financial advisors for individuals with $5 million to $500 million in investible assets.
The first wealth management example is that of savings and spending. For example, imagine a high net worth couple who had $8 million. They decided to invest a majority of that money in the stock market and retire. Then came the great crash and the $8 million went down to $2 million.
The couple now starts to worry whether $2 million will get them through their life goals. So, they consult a wealth manager. The wealth manager learns about their expenses, their income, and everything else that they want to achieve in their life. The life goals could include paying for their child’s college, saving some money aside for healthcare and retirement, and buying a property in Florida where they would like to retire. The wealth manager figures out that $2 million isn’t enough and another source of income needs to be created.
One member of the couple then decides to go back to work for a few years in order to save some money. The wealth manager estimates the savings that would be needed to fulfill all life goals. The client now knows how much needs to be saved every year and for how many years before he/she can re-retire again. If you are facing such a situation or need help with your wealth, then feel free to start a conversation with us.
Let’s look at another example. Let’s assume that a high net worth person has $10 million in liquid money and decides to retire. About 5 years into retirement, there is a world war and the American industry gets severely damaged. At that point, wouldn’t it be priceless for that person to still know that his/her portfolio will fulfill all life goals regardless of what is happening in the world. The best wealth manager would simulate this event and other such out-of-the-blue unexpected events on every client’s portfolio to check if the portfolio can withstand such shocks. The best wealth manager will not wait for something like this to happen. Periodic stress-testing of portfolios is an important benefit of wealth management.
Strategies of a Wealth Manager
Every wealth manager has a certain philosophy that he/she follows. This philosophy or approach towards wealth management defines the strategies of a wealth manager. The very best wealth manager, for example, may have a strategy of always aligning his/her interest with that of the client.
This alignment could happen in a few ways. One of the most significant ways could be a fee-only compensation model. With a fee-only model, the wealth manager earns a fee which is pre-determined with the client. The fee could be based on a fixed percentage of assets under management, an hourly rate, or a milestone-based setup. The important part of the fee-only model is that there are no commissions. In a fee-based model or other compensation models, wealth managers may also earn a commission on the product that they recommend. This might push wealth managers to recommend products that aren’t really necessary.
Another strategy of wealth management could be an equal focus on wealth creation and cost control. In order to understand why investment costs and not the same as fees, check out this guide on improving portfolio performance for investors with $5 million to $500 million in liquid assets. Some wealth management firms are so fixated on returns that they end up accruing significant taxes and other costs. Sure, the gross return may be the best, but what matters is the net return in the hands of the client after deducting all costs and taxes. Having an eye on the returns as well as the costs is important.
Communication, as pointed out by experienced wealth managers in this report, is a big part of any wealth management strategy. Clients in this industry demand the flow of information. They want to be updated during times of volatility and want someone “holding their hand” when faced with difficult decisions. Since wealth management is relationship-driven, maintaining open channels of regular communication is essential.
However, with most of the US working from home these days, the operations of wealth management firms have been impacted. Wealth managers cannot afford to not send timely information that is informative and easily understood by clients. The best wealth manager has, therefore, had to adapt to these changes. Get in touch with Pillar Wealth Management and see for yourself how seamless it is to discuss anything that may be on your mind about your finances. The use of technology allows the information to be delivered in a different way. Wealth management companies that invest in technology are, therefore, going to be better placed for the future.
Pillar Wealth Manager is one of the best in USA
As you go about evaluating various wealth management options, it may be a good idea for you to know a little more about Pillar Wealth Management. With over 60 years of combined experience, we have dealt with high net worth and ultra-high net worth clients and helped each one of our clients achieve what we call financial serenity. Give us a call to discuss what financial serenity can mean for you and your family.
Pillar Wealth Management is a registered fiduciary and works on a fee-only model, similar to the best wealth manager. We also make a commitment to save our clients $100,000 in costs for every $10 million in assets that they ask us to manage. We also perform quarterly stress tests using almost 100 years of stock market data. We believe that Pillar Wealth Manager is one of the best in USA because of such signature features.
Lastly, and most importantly, we have actual human beings answering the phone. We know our clients by name and we believe that every client is unique, their financial situation is unique, and their wealth management plans are unique. We do not use a one-size-fits-all approach.
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 high net worth individuals with $5 million to $500 million in investible assets, then feel free to start a conversation.
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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