The Complete Guide to What We Do
Goldman Sachs is one of the most well-known Wall Street firms in the world. It is one of the largest investment banks in the world and is ranked 62 on the Fortune 500 list. Former Goldman Sachs employees have gone on to hold important roles such as US Secretary of the Treasury, central bank president, and Prime Minister. Goldman Sachs is often associated with financial and political power and is one of the most influential financial institutions in the world. Goldman Sachs also has a private wealth management business unit that caters to high net worth and ultra-high net worth individuals. If you happen to have $10 million or more in investible liquid assets, then make sure you check out this complimentary guide on choosing the best financial advisor.
We’ve written this article to offer a guide to ultra-high net worth investors and we specifically mentioned $10 million because that is what Goldman Sachs Private Wealth Management looks for when signing up new clients. There are many wealth management firms that would be willing to work with someone who has a few million dollars in liquid assets. Pillar Wealth Management, a boutique firm, works with clients who have between $5 million and $500 million in liquid investible assets. The big decision for a high net worth individual is who to work with. One can either opt for a brand-name Wall Street firm or go with a niche boutique firm. The approach and the service delivery can be very different for both options.
In this article, we will discuss some key topics that can give you better insight into wealth management firms. We will talk about business owner private wealth management. We will then look at what investment advisory services entail and what distinguishes the best ones. We will discuss investment management briefly and then look at direct private investing.
Table of Contents
Business Owner Private Wealth Management
Business owner private wealth management refers to wealth management services that a business owner can make use of. Business owners are entrepreneurs who have worked long years to establish successful businesses throughout the US. They have toiled for years, put a lot of their money at risk, and have worked with and through people to get to where they are. Once a business is successful, the rewards can be satisfying as well. However, once the incomes grow, so do the money decisions. Pillar Wealth Management, a niche firm catering to individuals and families with $5 million to $500 million in investible liquid assets, meets business owners regularly who need guidance in important financial areas.
People may wonder that the wealthier a person is, the easier his/her life gets. This may be true in certain aspects of life. However, with more money comes more responsibility. The responsibility is of protecting wealth, of growing wealth, of giving away wealth to create a legacy, and of passing on wealth to the next generation. These are all tough questions with significant legal and financial implications. If you are someone who is well-versed with finance, law, and investment management, then you can take informed decisions. However, if you want to spend your time doing the thing you love the most – managing your business – then you could do with some professional advice.Schedule a free consultation with Pillar Wealth Management to explore this option.
A reputed wealth manager can help structure your finances so that you can achieve all your life goals. To know more about wealth management, we encourage you to read this book called The Ultimate Guide to Choosing the Best Financial Advisor: For Investors With $5 Million to $500 Million in Liquid Assets.
Investment Advisory Services
We read a lot about investment advisory services these days. Such services focus primarily on investments. After all, it is only by investing smartly that you can create significant wealth over the long term. A hedge fund, for example, is a form of investment advisory service. Goldman Sachs Private Wealth Management also offers investment advice. In fact, all wealth management firms offer investment advice. They key difference between an average quality of advice and top quality advice is the connection of the advice with the client’s goals.
Money by itself isn’t going to do anything. It will just be a number. However, when that money can help you purchase your dream home, live your desired lifestyle, help send your kids (or grandchildren) to a good school, and contribute to a cause that you are passionate about, then it has a lot more meaning and significance. You can read more about the connect between life goals and investment advice in this downloadable guide on choosing the best financial advisor for individuals with $5 million to $500 million in investible assets.
One major difference between an investment advisory and a wealth management firm is the breadth of service offerings. Investment advisory deals primarily with investments. Wealth management deals with all aspects of a high net worth or ultra-high net worth person’s financial life. If you visit the website of any wealth management firm, then you will notice that the list of services covers investments, retirement planning, estate planning, taxation, philanthropy, sometimes real estate, and general financial planning. The idea of wealth management is to have one person answerable for all your financial needs.You save time and money. Feel free to start a conversation with Pillar Wealth Management to know more about wealth management.
You may picture investment management as a group of people in suits sitting in a fancy office at a downtown location talking about what stock to buy. However, that is a “glamorized” depiction of investment management. Whether it is Goldman Sachs Private Wealth Management or any other wealth management firm, the key to investment management is to prepare a strategy and then regularly update it as per the changing situation. We highly recommend you to check out this guide on improving portfolio performance for investors with $5 million to $500 million in liquid investible assets.
The markets are constantly changing and so is the world. The client’s personal life also changes everyday and life goals can change accordingly. Therefore, if a wealth manager talks about long-duration assumptions like a 20-year investment return average of 10%, you should be skeptical. Over the 20 years, the average may be 10% but there will be years when the return is -20% and there will be years when the return is +20%. One cannot model an investment strategy based purely on such assumptions. The only things constant, as they say, are death and taxes. We would add a third thing – expenses. Your basic lifestyle expenses are probably going to increase at the rate of inflation but they won’t go down unless you are forced to take a downgrade on your quality of life.
So, investment management has to be a carefully thought out plan. A good wealth manager will perform regular stress tests to check if the portfolio can handle adverse events and whether you are on track to achieving your goals. A top wealth manager also has to pay careful attention to investment costs. Get in touch with Hutch Ashoo to discuss more about this aspect of investment management.
Goldman Sachs Private Wealth Management Investment Costs
As mentioned in the previous section, investment costs matter a lot. They matter as much as investment returns. Why do we say so? Because, the net returns that you, the client, see at the end of the day are the returns after deducting taxes, brokerage charges, expense ratios, and fees. So, even if your gross returns are impressive, they will be lowered ultimately depending on how the investment costs are structured. Whether it is Goldman Sachs Private Wealth Management or any other wealth management firm, the important quality of the wealth manager is to optimize the investment costs.
You may be surprised to find out just how many investment managers and wealth managers are solely focused on gross investment returns. They spend a significant portion of their time and energy trying to outperform the benchmarks and boost returns at all costs. This is not necessarily a bad thing to do. However, let’s take one example to understand the point we are trying to make.
Suppose a wealth manager tries to boost portfolio returns by following a high-frequency trading strategy. Stocks get bought and sold every few weeks and there is high turnover. This may give some extra returns. But, it will also result in higher short-term capital gains taxes. It will result in more brokerage fees and other transaction costs. Contrast this approach with a long-term investment in a low-cost passive fund. The taxes will be on the long-term capital gains and the investment costs will be one-time (and minimal). Depending on the client’s financial goals, the second strategy may be a better fit. You can read more about active vs passive investing in this short guide on critical shifts needed to maximize portfolio returns.
Direct Private Investing
Goldman Sachs Private Wealth Management offers the service of direct private investing. It refers to investments done by affluent individuals in traditional as well as alternative asset classes. The alternative asset classes can include real estate, clean energy, and other forms of debt. Direct private investing can happen within the US, across Europe, and in other high-growth areas like Asia. Direct private investing is normally meant for sophisticated investors that understand the underlying risks of the asset classes in which they invest. The benefit of direct private investing is the diversification that it offers and the high returns that the portfolio can earn if the investments are successful.
The key point about direct private investing is that your wealth manager should have expertise in a range of asset classes. Either the wealth management firm should have this expertise in-house or it should be able to bring in an outside expert who is reliable and has a track record. You want your advisor to have enough experience in the alternative asset classes. For example, if you are planning to do a real estate transaction, then you do not want to work with any average real estate expert. You want to work with someone who has worked on multi-million dollar deals and preferably someone who has advised business moguls and celebrities. We mention this because dealing in a $1 million property is very different from dealing in a $50 million property. There are specific skill sets that are needed to structure multi-million dollar deals.
If you want to discuss direct private investing in detail and whether it is the right option for you, feel free to reach out to Pillar Wealth Management.
How Is Pillar Wealth Management Unique?
You now know a decent amount about wealth management and how investment management services are offered. As you go about searching for a top wealth manager, we would like to mention a few things about Pillar Wealth Management. The niche firm follows a philosophy of financial serenity. It means that clients can sleep easy at night without worrying about what the market will do to their portfolios. It also means that clients will progress towards achieving their financial goals in a stress-free manner.
Pillar Wealth Management is, perhaps, one of the few firms that has a goal towards saving investment costs.It’s goal is to save the client $100,000 for every $10 million in assets that it is asked to manage. They try to attain this with better performance, lower losses/volatility as well as lower taxes and expenses. Pillar Wealth Management also takes plan updates seriously and regularly stress-tests, every 90 days, client portfolios for 1,000 random scenarios. This stress-test is based on historical market data of the past almost 100 years. Lastly, Pillar Wealth Management is taking only 17 new clients this year because a smaller size allows the firm to provide personalized white-glove services to its clients.
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.
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