The Complete Guide to What We Do
Morgan Stanley is a multinational financial institution. It is headquartered in New York City and has offices in more than 42 countries. The company hires more than 60,000 employees all over the world. Clearly, Morgan Stanley has a strong brand and a global presence. Morgan Stanley has 3 major business segments, institutional securities group, Morgan Stanley wealth management, and investment management. If you are thinking of working with a wealth manager and happen to have $10 million or more in investible liquid assets, then we highly encourage you to check out this guide on choosing the best financial advisor.
You read Morgan Stanley’s name quite frequently when there is an acquisition or a merger. The company’s investment banking division has worked on some high profile deals. The company is a huge Wall Street firm and was incidentally formed by the partners of another Wall Street major JP Morgan. Being a listed company, Morgan Stanley’s management is answerable to its clients as well as its shareholders. This is a key factor that distinguishes the company from a niche wealth management firm like, say, Pillar Wealth Management, a firm that offers wealth management services to individuals and families with $5 million to $500 million in investible liquid assets.
Wanting to work with a wealth manager as opposed to handling your own finances is a major decision. Choosing the best wealth management firm for your needs is also another significant decision. It requires some insights as to how the different wealth management firms operate. To make things easier for you, we decided to write the following guide. It covers Morgan Stanley wealth management background, some tips for finding the right financial advisor, and Morgan Stanley wealth management awards and recognition. We will also look at Morgan Stanley wealth management brokerage partnerships.
Table of Contents
Morgan Stanley Wealth Management Background
The Morgan Stanley wealth management background is quite interesting.Morgan Stanley wealth management has been around for over 40 years. The practice is quite extensive and comprises of 500 offices and 16,000 financial advisors spread out all over the world.Pillar Wealth Management, on the other hand, is a boutique firm focused on offering personalized white-glove wealth management services for more than 30 years to clients with $5 million to $500 million in liquid assets.
The list of services that Morgan Stanley offers is quite extensive. It includes portfolio management, legacy planning, philanthropy management, family governance, etc. It also has a lifestyle program that involves offers on premium brands. Morgan Stanley also offers to connect clients to its network of financial analysts and private bankers. This approach is very different from, say, one wealth manager handling everything for you for decades. A niche firm like Pillar Wealth Management has two co-founders and you will work with one of them for all your needs. Whether it is retirement planning, legacy planning, real estate advisory, advice on selling a business and investing the windfalls, or any aspect of wealth management, you can simply call the wealth manager and speak directly about anything related to your finances. It is almost like calling your family friend who you know for decades. If you get a chance, make sure you have a look at this book called The Ultimate Guide to Choosing the Best Financial Advisor: For Investors With $5 Million to $500 Million in Liquid Assets.
The big benefit of one wealth manager handling all aspects of your wealth is that the decisions are holistic. Every decision is made keeping in mind the tax implications, succession considerations, and other financial goals in mind. Get in touch with Hutch Ashoo to know more.
Morgan Stanley Wealth Management Brokerage Partnerships
Morgan Stanley wealth management brokerage partnerships refers to the brokerage services of the firm sought by institutional clients. Hedge funds and other money managers partner with Morgan Stanley, who acts as a broker-dealer. The official name of the broker-dealer designation is Morgan Stanley Smith Barney. Having such partnerships is great for the backend infrastructure building of any investment management operation. However, even more important is the way the investment strategy is executed.
Investments by themselves do not mean much. They derive importance because they act as a vehicle that allows a high net worth or ultra-high net worth individual to achieve their life goals. So, the most important first step is to understand what a client’s financial situation currently is and where he/she wants to go. Based on a careful analysis, an investment strategy can then be created. If the client can reach all financial goals through low-risk passive investing, then there is no point in chasing high-risk high-return investments. You can read more about such investment concepts in this guide on improving portfolio performance for investors with $5 million to $500 million in investible liquid assets.
A top wealth manager will also give careful attention to the investment costs. This part is really important regardless of whether you decide to work with Morgan Stanley wealth management or anyone else. You are probably aware of the fact short-term capital gains tax rates are higher than long-term capital gains rates. So, while frequent trading may allow a fund manager to “beat the market”, the resultant short-term gains taxes will also eat into your returns. Investing in a fund with a high expense ratio, paying frequent brokerage fees, and other such costs can add up. Start a conversation with Pillar Wealth Management to know more.
Morgan Stanley Wealth Management Awards and Recognition
The list of Morgan Stanley wealth management awards and recognition is quite impressive. For example, in 2017, Morgan Stanley was ranked as the No.2 wealth management firm in the US. This list included some big names like Bank of America. In the same year, seven Morgan Stanley wealth management advisors were ranked in the top 20 Forbes’ list of the best wealth advisors. In 2020, 18 of Morgan Stanley’s advisor teams were in Barron’s top private wealth management teams list.
There are many such distinctions that the Morgan Stanley wealth management practice has earned. However, in our opinion, the most important factors that define a top wealth management firm are professionalism and ethics. Schedule a free consultation with Pillar Wealth Management to know more.Wealth management is a trust-centric activity. The decisions made by a wealth manager deeply impact the present and future life of a client. We encourage you to browse through this complimentary guide on choosing the best financial advisor for those with $5 million to $500 million in liquid assets.
A high net worth client will expect his/her wealth manager to always act in his/her best interests. The client would also expect the investment recommendations to be connected to his/her life goals rather than some compulsion of the wealth manager to earn a commission or further the asset management segment of his/her firm. You might ask, how can one incentivize the wealth manager in the right way and what qualifications can a wealth manager have that can likely make a wealth manager ethical and honest? There are many things at play, whether he/she is a registered fiduciary and what the fee structure is. We will discuss all these topics in the next section.
Is Morgan Stanley Wealth Management Fiduciary Fee-Only?
A fiduciary is an investment advisor that always acts in the best interests of his/her client. To become a registered fiduciary, an advisor has to register with either the SEC or the state regulator. This registration is on the line every time the advisor works with a client. Therefore, there is an incentive for the advisor to act right and inform the client whenever there is any conflict of interest. You can speak to Hutch Ashoo and learn more about how being a fiduciary helps deliver top-notch service.
The wealth management industry has two main compensation models. First is a fee-only model where, as the name suggests, the wealth manager is only paid a fee. The fee is usually a fixed percentage of the total liquid assets of the client that the wealth manager is handling. 1% of the total assets under management is a common amount.
The other compensation model is a fee-based one. Here, in addition to the fees, the wealth manager can also earn commissions from products that a client purchases/invests in. For example, if a client invests in a specific mutual fund or buys a specific insurance policy, then the wealth manager gets a commission from the product company for “aiding the sale” of that product.
While there is nothing wrong with getting paid to bring in new business, there may be a possibility that the wealth manager gets motivated by the commissions and, in the process, ends up recommending a product that the client does not really need. Some big Wall Street firms have asset management segments and the advisors of such firms may be motivated to recommend its products instead of better competitor products.
Tips for Finding the Right Financial Advisor
There are a few tips for finding the right financial advisor that we would like to offer. However, before we do that, you must take the first step of self-introspection. As we have discussed in this short guide on 5 critical shifts needed to maximize portfolio performance for investors with $5 million to $500 million in investible assets, knowing what you want out of your wealth management engagement is crucial. Once you know why you want to work with a wealth manager and what areas area priority, you can then easily identify the best wealth management firms that fit your needs.
You can begin your search for a top wealth manager by going online and looking for wealth managers near your area. You can also browse the websites of the big brand-name firms. If you want a more personalized experience with a customized solution, then a niche firm may work out well. While exploring a wealth management firm, check the list of services it offers and what expertise it has. Looking at things like the amount of experience and the client profile is also very important. Almost every wealth management firm has a minimum account size that it works with.
One great way to find promising wealth managers is to speak to the people you know. Your colleagues at work, your relatives, friends, and people in your personal network may already be working with a reputed wealth management firm. Your own folks will also give you an honest opinion of their experience. Glossy testimonials on websites often show the best side of a wealth management firm. However, you want to know all the ins and outs of working with a particular firm. You can also speak to Pillar Wealth Management about its offerings.
A few words about Pillar Wealth Management
Pillar Wealth Management has been mentioned multiple times in this guide. It is a niche firm that is taking only 17 new clients this year. The low client count allows the firm to go in-depth with each client and offer highly personalized wealth management. By personalized, we mean custom wealth plans, regular monitoring and updates, and our unique stress testing of portfolios. We use more than 100 years of market data to simulate 1,000 scenarios that can pose a risk to the achievement of the financial goals of the client.
Pillar Wealth Management also places special emphasis on costs. In fact, it makes a commitment that might be unique in the wealth management industry. Pillar Wealth Management commits to saving its clients $100,000 for every $10 million that it is asked to manage. The firm does not simply talk about saving costs. It actually acts on the principle and commits to achieving it.
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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