The tech industry has made many millionaires and billionaires over the years. Venture capital and startups have been the source of wealth for many high net worth and ultra-high net worth individuals living in the San Francisco area. Other industries like real estate, hospitality, healthcare, and financial services are also major employers in the Golden City. No matter what industry you made your money in, one thing that is common among high net worth individuals is the need to protect and grow the hard-earned wealth. It is why “Wealth Manager San Francisco” is a popular topic in search engines for the west coast.
Wealth management may sound glamorous; however, it is simply a specialized type of financial advisory. It involves advanced financial planning, investment management, tax planning, estate planning, real estate advisory, succession planning, retirement planning, and many other topics. However, the key aspect that defines wealth management is that it is geared towards affluent clients. For example, Pillar Wealth Management works with clients who have $5 million to $500 million in liquid investible assets.
Managing wealth for high net worth accounts is a lot different than managing accounts worth a few hundred thousand dollars. The issues and questions faced by high net worth clients are unique in their own way. Plus, the stakes are higher too with millions of dollars. You can check out this guide on finding the best financial advisors or wealth managers for individuals with $10 million or more in liquid assets to get a detailed view on such issues.
If you are a high net worth or ultra-high net worth individual in the San Francisco area and are thinking about working with a wealth manager, then the following article will help you to better understand wealth management and make an informed decision.
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Wealth Management Benefits
One of the biggest benefits of working with a wealth manager is that you get all services under one roof. You speak to one person for all your financial needs. There is no need to consult an accountant, a tax expert, a portfolio manager, and other professionals separately. Pillar Wealth Management, for example, offers a host of services to clients with $5 million to $500 million in liquid investible assets.
With one wealth manager at the helm, every decision is also holistic. If multiple professionals are involved, then each one may work in their own directions. They may not be in sync and their decision making may not be aligned collectively. But, if one wealth manager oversees all decisions, then all areas are looked at carefully.
Lastly, a good wealth manager knows your goals, your financial situation, and your family. Whenever you call, chances are that the wealth manager knows you by your first name. So, whenever you need to speak about anything financial, you can be confident that the wealth manager is up-to-speed with your situation.
Advanced Financial Planning
High net worth and ultra-high net worth individuals require something more than just basic financial planning. For them, a financial plan isn’t just about understanding their risk tolerance and then sticking to generic investment plans that assume a certain rate of return and an inflation rate. For high net worth individuals, the question is about whether it makes sense to pay short-term capital gains tax or long term, how to minimize gift tax, how to pass on a multi-million-dollar business to the next generation, and so on. For them, it is about maintaining a minimum level of lifestyle while still being able to donate money to a cause or creating a legacy.
Such decisions are more complex and have far-reaching impacts. Therefore, they require advanced financial planning. You would agree that selling a $500,000 house is different than selling a $20 million property. The skillset, the approach, and the experience is completely different in both instances. If you are selling a $20 million property, you want advice from someone who has done deals with celebrities and moguls. You won’t be satisfied working with simple real estate planning advisor. Feel free to get in touch with Hutch Ashoo to know what kind of experience Pillar Wealth Management has in handling high net worth finances.
A good financial planner for high net worth individuals isn’t just good with the technical aspects of finance. He/she is also good with personal skills. It is the job of a financial planner to connect your financial goals to the decisions that are made. You can read more about advanced financial planning in this comprehensive guide called The Ultimate Guide to Choosing the Best Financial Advisor: For Investors With $5 Million to $500 Million in Liquid Assets.
Any top wealth managers or financial advisor San Francisco firm will understand the importance of investment costs. Investment management isn’t just about “beating the market”. Focusing single-mindedly on portfolio returns alone can turn out to detrimental to a high net worth portfolio. A lot of the big-name Wall Street firms tend to try and beat the benchmark indices by making high-risk trades.
Investment managers may trade frequently in order to make high returns. They try to find stock after stock that can give them outsized returns. If they are successful, then everything appears great. But, if things do not turn out as planned, the results can be devastating. Just ask Hutch Ashoo about a client whose portfolio went from$32 million to $5 million during the dotcom crash. The client’s investment manager was invested heavily in tech stocks that were at the height of their “boom”. When the boom went to bust, it was the client who was left to bear the costs.
Trading too frequently also results in short-term capital gains taxes. As you may already know, short-term capital gains tax rates are reasonably higher than long-term capital gains tax rates. We would also like to point out that in the long-term most fund managers do not beat the market. Except for a few outliers like Warren Buffet or other investment gurus, most fund managers end up near or below the market levels. However, the costs that they incur in the form of short-term capital gains and brokerage/trading fees due to frequent trading will hit the client’s net returns. The net return post taxes and fees is what counts. You can read more about this topic in this downloadable guide on improving portfolio performance for investors with $5 million to $500 million in liquid assets.
Investment Management San Francisco
Another aspect of successful investment management San Francisco firms will acknowledge is a systematized approach. There is a saying that the investment process should be non-emotional. It should not be done on hunches. A good portfolio manager should be able to spell out what to buy, when to buy, how much to buy, and when to exit. Then it does not matter what the market is doing, the investment management system has to scrupulously follow the rules that have been set.
Besides formulating and following investment rules, a systematized approach also means regular review and updates. Many financial advisors san francisco tend to create a financial plan once and then put it away in a drawer for years. However, the world around us does not remain unchanged for years. It literally changes every day. Our financial situation changes every day and our goals may also change time and again. Life is what happens when you are busy making plans. So, the top investment management San Francisco firms also revisit the existing portfoliosto check if theyare taking their clients closer to their goals.
The really top wealth manager San Francisco firms that handle high net worth and ultra-high net worth individuals will perform stress tests on their client portfolios. Schedule your free consultation with Pillar Wealth Management to know how it uses market data from the past 100 years to simulate 1000 scenarios for comprehensively stress-testing portfolios.
Some firms often tend to create a generic update report or newsletter and send them to clients. However, every client’s situation is unique and therefore the update is also unique. A generic approach does not tend to help very much to the high net worth client. This customized approach also has to become part of the investment management system.
The Right Mindset for Maximizing Portfolio Performance
As a high net worth individual, it is important to have the right expectations and understanding of wealth management. The first thing you want to understand is what you want out of your money. Money by itself doesn’t do anything. It acts as a means to achieve something. Therefore, the first step before speaking to any wealth management San Francisco firm is to introspect.
You want to know what your goals are, what kind of standard of living you desire for yourself and your family, and what kind of legacy you want to leave behind. One of the qualities of a good wealth manager is to be able to determine the required level of portfolio performance based on your goals, your lifestyle, your current financial situation, and your dreams. We have discussed this point in this guide on 5 critical shifts for maximizing portfolio growth for families worth $5 million to $500 million.
Secondly, you also need to realize that maximizing portfolio performance does not mean maximizing the rate of return. You know why you are investing and what your end goals are. If earning a moderate return while taking on lower risks gets you to your goals, then that is perfectly fine. You do not have to feel pressured to earn the highest possible return while taking on high risks. You should not feel compelled to beat the market every year. Ultimately, the focus should not be on the number but rather on your goals.
If you want to discuss how to get to your goals in a stress-free manner, then Pillar Wealth Management’s philosophy of financial serenity may appeal to you. Feel free to start a conversation and get to know more about it.
Asset Management San Francisco Trusted Advice
Now that you know useful information about investment management, portfolio management, and wealth management, you may be thinking about finding a wealth advisor san francisco to work with. You probably are looking to work with someone who is professional and ethical. After all, it is your hard-earned money that we are talking about. Asset management San Francisco trusted advice would be to work with someone who is a registered fiduciary. A fiduciary is someone who is bound to always act in the best interests of his/her clients. If there is ever a conflict of interest, then the fiduciary has to point it out.
Another wealth manager San Francisco trusted advice is to work with a fee-only financial planner. In financial advisory, there are various compensation structures. There is fee-only, fee-based, and commission-only. A fee-only model works well because it involves only a fee. The amount of the fee or the way it is calculated is agreed beforehand. So, everything is crystal clear and there is no motivation for the advisor to “push” any products in the hope of earning a commission. The quality of advice can, potentially, also improve due to the absence of bias. We have discussed compensation models at length in this complimentary guide on choosing a financial advisor for individuals with $5 million to $500 million in investible assets.
Pillar Wealth Management is one firm that is a fiduciary as well as a fee-only wealth manager san francisco. It has over 60 years of combined experience in handling high net worth portfolios ranging from $5 million to $500 million. The firm offers white-glove services that are personalized and customized. It believes in customization because every client is unique. Every client’s financial situation and life goals are unique. A generic plan does not work for everyone.
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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