Top Wealth Management Companies for High Net Worth Individuals
In the world of high net worth and ultra-high net worth individuals, wealth management plays a big role in ensuring financial success. Top wealth management companies help affluent individuals and families achieve their financial goals and targets by providing them various services and in-depth knowledge of the industry. However, what exactly are these services, and what do wealth management companies do? More importantly, how are wealth managers paid? When it comes to wealth managers and advisors, despite their importance, a lot of high net worth families forego them and go to private banks and large investment firms instead. Ultimately, this proves to be a regretful decision because these institutions lack the basic features and characteristics that are necessary for successful wealth management. You can learn more about what these are from our complete guide on choosing the right financial advisor for investors worth $10 million or more.
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.
Pillar Wealth Management has an expert and dedicated team of wealth managers who have been working in the industry for more than 30 years. This equips them with all the knowledge and skills necessary for helping high net worth clients work towards achieving their financial goals. Our ultra-high net worth money managers work closely with clients to really help them understand what they want to achieve and develop customized investment plans accordingly. We focus more than just on short-term performance numbers and help clients attain true financial serenity. You can find out more about why this matters by reading our comprehensive guide on improving portfolio performance.
In this blog, we’ll be discussing what a wealth management company is, how it is different from other financial institutions, what the role of wealth managers is, and how they are paid. Let’s dive in.
What is a Wealth Management Company?
A wealth management company is a kind of financial institution that offers wealth management advisory and other financial services. Most top wealth management companies have a minimum limit for the wealth they will handle. Therefore, these companies usually cater to high net worth individuals and ultra-high net worth families with $5 million to $500 million in liquid assets. This is because such affluent individuals not only have a vast amount of wealth, but that wealth also consists of a diverse set of assets.
As a result, these individuals usually lack the time or expertise to handle such wealth efficiently. This is where wealth management companies come in. Using their extensive experience and knowledge, they take a holistic approach to handling affluent individuals’ wealth. They take care of various financial aspects such as their retirement, legacy planning, etc., and help their clients achieve their short and long-term financial goals and targets.
Difference Between Top Wealth Management Companies and Other Financial Institutions
When it comes to financial guidance, there are a lot of financial institutions out there offering various financial and advisory services. There are private banks, investment banks, brokerage houses, investment firms, and other institutions. However, not all of these prove to be the best option for high net worth individuals. Here are a few vital differences between wealth management companies and these financial institutions.
Expertise
The first major difference is the level of expertise. If you go to institutions such as private banks, you will find most wealth management services being offered. However, private banks lack expertise in these services. Since they are primarily focused on offering banking services, their expertise lies over there.
Therefore, any wealth management services they offer are not at the same level as those offered by wealth management services. At Pillar Wealth Management, our wealth managers have more than sixty years of combined experience of obsessively helping our clients manage their wealth and gear them for financial success.Start a conversation with our expert advisors today to know more.
Personalization
Personalization is the key to financial success and security. When you go to institutions like investment firms and banks for investment advice or financial planning, they will ask you some very basic questions. They might ask you about your risk tolerance, what quantitative goal you have in mind for growing your assets, and that’s about it. Based on that limited information, they will offer you fixed investment packages that have proven to be successful for their bottom line and their shareholders and offer you no real benefits except for some short-term high returns.
True financial success and serenity lie in aligning your investment and financial plans with your overall long-term goals and aspirations in life. And that can only happen when you have a personalized financial plan that purely caters to your goals and targets. Only the top wealth management companies help develop these tailored financial solutions for their clients with $5 million to $500 million in liquid assets. Read about why these goals are important from our handy guide on maximizing portfolio growth strategies for high net worth investors.
Conflict of Interest
This is one of the most concerning differences between wealth management companies and other financial institutions. The whole idea behind wealth management is attaining financial serenity. You want to completely leave your wealth and assets to the other company so that they can manage it in a way that best serves your needs and goals, and you don’t have to worry about it at all. This is only possible when the firm holds itself to a fiduciary standard, acting only in your best interests.
Unfortunately, not all financial institutions offer fiduciary services. As a result, they often face a conflict of interest, which forces them to guide you in a way that doesn’t entirely benefit you. This happens most commonly with brokers. Since they earn commission every time they buy and sell securities and other products, they might be tempted to carry out excessive transactions or push products that earn them more commission but don’t increase your net worth. These are just some of the signs that your advisor isn’t acting in your best interests. Find out about other warning signs by clicking here to read our ultimate guide on choosing the best financial advisor.
Management Approach
Either because they lack expertise or because of the conflict of interest, many financial institutions adopt a very different management approach as compared to wealth management companies. With most of these other financial institutions, you’ll notice that they tend to adopt a very aggressive or active money management approach. This usually involves betting against the market, leveraging hot buys and market trends, and a lot of guesswork.
This not only gives you short-term high returns but also leads to high transaction costs and taxes on short term capital gains. Top wealth management companies, such as Pillar Wealth Management, adopt a clever mix of active and passive money management to help you bring in high returns from the market as well as keep your costs low and mitigate any risks. You can learn more about building your wealth properly and protecting your assets by ordering a free copy of our book, The Art of Protecting Ultra-High Net Worth Portfolios and Estates – Strategies for Families Worth $25 million to $500 million.
Clientele
As mentioned earlier, wealth management companies tend to stick to a minimum limit of net worth, and that’s why they mainly cater to high net worth as well as ultra-high net worth individuals and families.
However, other financial institutions usually have a lower limit, such as having a net worth of at least six figures. That’s why they don’t only cater to high net worth clients. As a result, as we mentioned previously, they don’t have that expertise in dealing with high net worth clients that most ultra-high net worth money managers at wealth management firms have.
Services
Another basic difference you will find between these financial institutions is the level of services offered. Some will only offer investment guidance without actually carrying it out. Some will only offer banking services, while some might just focus on retirement or estate planning.
Wealth management companies have a more holistic approach, and that’s why they offer all financial services under one roof for easy and efficient wealth management. At Pillar Wealth Management, we provide a range of financial services, from investment management and retirement planning to legacy planning, banking, and a lot more. Learn more about all the financial and advisory services we offer by getting in touch with one of our managers.
What is the Role of Wealth Manager?
So, what exactly do wealth managers do, and what makes wealth management companies so crucial for the financial success of individuals with $5 million to $500 million in liquid assets? Here are a few of the services that wealth managers provide.
You can also check out our complete guide on choosing an advisor for investors worth $10 million or more.
Financial Planning
Wealth managers help you with financial planning. This is a crucial and complicated step that involves a lot of strategizing and developing a comprehensive plan that accounts for an individual’s short as well as long term goals and targets. It uses an individual’s aspirations in life and desired lifestyle to devise financial strategies accordingly. They account for various factors, such as an individual’s age, preferences, philanthropic plans, legacy plans, etc.
Investment Management
Investments make up the foundation of any wealth management strategy. Ultimately, it is the investments that help grow your wealth, diversify into other assets, and maintain a steady stream of income after retirement so that you can live the life you want. However, all this is only possible through smart investment management, which only the most experienced wealth managers can do. They use their extensive knowledge and market research to guide you towards the most appropriate and best opportunities for you.
Risk Management
High net worth families and individuals also carry a lot of risk with their significant wealth. It could be market volatility or a sudden critical illness that could lead them to lose large chunks of their wealth. That’s why they need insurance planning and risk management. These are also quite crucial yet complicated services that only the best wealth managers can handle.
Retirement Planning
Retirement planning isn’t as easy as it sounds and is even more difficult for high net worth individuals. That’s why they need ultra-high net worth money managers and wealth managers to develop the right retirement plans to help them achieve all their retirement goals. Each stage of retirement requires different strategies and adjustments in their financial plan. Wealth managers know how to handle these adjustments.
Estate Planning
Most high net worth individuals are concerned with the financial security of their families, not only in the present but also after they are gone. That’s why one of the roles that wealth managers play is to help such individuals with their estate planning. They help them with the division and distribution of their wealth and help ensure that their beneficiaries get the most out of their inheritance.
How Are Wealth Managers Paid?
Wealth managers usually charge a flat fee of around 1%on the Assets Under Management (AUM). So, if a client’s net worth of assets being managed is around $100 million, the wealth manager charges 1% of that, which means he takes home around $1 million. The more he grows his client’s wealth, the more he earns. Therefore, there’s no conflict of interest.
Choosing Top Wealth Management Companies
There are a lot of financial institutions as well as wealth management firms out there. However, only the top wealth management companies can truly help you get financial success and security. Some of the factors you can judge them on are their services, experience, track record, reviews, costs, etc.
Pillar Wealth Management is a 100% fee-only white-glove wealth management firm. Our managers have more than sixty years of combined experience in this industry, which allows us to help our affluent clients attain true financial serenity. We offer tailored financial solutions through a wide range of financial services and expert wealth managers and advisors. Start your wealth management today by consulting one of our wealth managers.
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