Wealth is the value of all the assets that a person owns. It is the accumulation of resources that are valuable and scarce. Wealth is measured most commonly in terms of net worth. Net worth is basically assets minus liabilities. It is what’s left after you pay off all your debts.
A person who successfully accumulates a large amount of net worth (e.g. high net worth individuals) is understood to be wealthy. A professional that manages the wealth of the wealthy is known as a wealth advisor for ultra high net worth individuals.
If you are one of those fortunate (and smart) individuals who have built up such wealth, then you would want to protect that wealth and grow it. Doing so requires making important decisions on a regular basis.
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These decisions have to be well-informed, holistic, and forward-looking. If you have the time and expertise to study the investment world, understand all of the investment costs, tax planning, and other aspects of financial planning, then you can probably manage your wealth. However, for most individuals, that is not feasible.
Luckily for them, there are professionals who specialize in managing wealth. They are called wealth advisors. Pillar Wealth Management, for example, has more than 60 years of combined experience in managing portfolios ranging from $5 million to $500 million.
In this article, we will discuss what is a wealth advisor. We will then answer the question “do I need a wealth manager or a financial advisor”. Next, we will give you x tips for choosing a wealth advisor. And finally, for those who are interested, we will share how to work with PillarWM wealth advisor.
What Is a Wealth Advisor?
A wealth advisor is someone who has a deeper understanding of the financial issues faced by high net worth individuals. A wealth advisor for ultra high net worth individuals offers a more personalized service than financial advisors would. Such wealth advisors take on fewer clients but go into every small detail.
Wealth advisors begin their work by first getting to know what the client’s goals are, what their current situation is, and what their motivations are.
Based on a very deep and detailed understanding of the client, a wealth advisor then looks at every wealth decision from multiple perspectives.
Pillar Wealth Management, for example, is a wealth management firm that specializes in ultra-high net worth strategies. For us, it isn’t about simply managing a portfolio of stocks, bonds, and properties. We get approached by clients with questions like:
- • How will that portfolio grow?
- • Who will safeguard that portfolio when the client is no more?
- • How can a lifestyle be assured for the family?
- • How can successors be groomed to handle the fortune?
- • How the money will be distributed equally?
The more money you have, the more complex are the decisions. After all, with more affluence comes more responsibility to protect, preserve, and grow your wealth.
Giving away that wealth is also not a simple task. A wealth advisor has to be able to analyze every wealth decision from the perspective of returns, taxes, costs, estate planning, retirement planning, life goals, etc. simultaneously to give the client the best possible advice.
To learn about the much-neglected cost portion, and about what is a wealth advisor, check out this complimentary guide on improving portfolio performance.
Wealth advisors charge a fee for the services that they offer. The compensation is either fee-only or fee-based. The fee-only model involves a fee that is calculated as a percentage of the total assets invested through the wealth advisor.
A fee-only model can also be hourly or milestone-based as well. A fee-based model involves fees as well as commissions. The wealth advisor gets commissions when certain investment products are purchased by/invested in by the client.
At Pillar Wealth Management, we believe that the fee-only model provides the most unbiased advice. If you want to work with an exclusive, fee-only, fiduciary financial advisor that specializes in high and ultra-high net worth portfolios, then reach out to Hutch Ashoo to discuss your situation and get some useful pointers.
As wealth advisors work with high net worth clients, they will generally have a minimum portfolio size threshold. They will only work with clients whose net worth meets that minimum level.
So, it is probably a good idea to ask a prospective wealth advisor on what their minimum account size is before doing further research into the offerings of that wealth advisor.
It would not be great for you to spend a few hours researching and speaking with a wealth advisor only to find out later on that the advisor won’t be able to work with you.
Do I Need a Wealth Manager or a Financial Advisor?
Once you read more about wealth management and financial advisory, you will notice two words being used very often. One is wealth management and the other is financial advisor.
They may sound quite similar but they are actually not. So, you might ask yourself one question – do I need a wealth manager or a financial advisor? You are not alone in asking this question.
Many high net worth individuals often aren’t fully aware of the difference between a wealth manager and a financial advisor.
A financial advisor is a general term given to a professional that helps clients manage their money. Different people have different amounts of net worth.
Those with an average net worth usually have issues like retirement, portfolio management, and general financial planning to take care of.
Individuals with a few million to a few hundred million dollars in net worth have a completely different set of issues to deal with. High net worth clients would want help not only with retirement planning and tax planning, but also things like succession planning, philanthropy, estate planning, and legal planning.
Selling a $500,000 property is very much different than selling a $50 million property. The costs and investment aspects for a $100,000 portfolio of stocks and bonds are very different from those for a $100 million portfolio.
The stakes are much higher when it comes to high and ultra-high net worth accounts. So, the difference between a financial advisor and a wealth manager is the clientele and the array of services offered.
You can read more about financial advisors and wealth managers in our guide: The Ultimate Guide to Choosing the Best Financial Advisor: For Investors With $5 Million to $500 Million in Liquid Assets.
If you are a high net worth individual, then you want to work with a wealth manager. A wealth manager is a specific type of financial advisor.
All wealth managers are financial advisors, but not all financial advisors are wealth managers. Your financial issues are something that a wealth advisor for ultra high net worth individuals will be able to address.
Given the type of clientele that wealth managers serve, the approach is a lot more quality-driven than volume-driven. The most successful wealth managers will take on very few clients.
But, with those few clients, they will go in-depth and look at every aspect of the client’s financial life. Schedule your free consultation with Pillar Wealth Management to know how the firm took on only 17 clients last year and how that approach allowed the firm to advise its high net worth clients.
Another important point to note is that the best wealth advisors will bring in an expert to address an area which they do not have expertise in. They will coordinate with the right professionals and do whatever it takes to make the best decisions for the client.
Tips for Choosing a Wealth Advisor
In order to make your life simple and to help you in your search for the best wealth advisor for ultra high net worth portfolios, we are happy to share 6 tips for choosing a wealth advisor.
Tip 1 – Know your net worth and find an advisor who works with similar account sizes. Generally, if you have more than $1 million in investible assets, then a wealth manager will be a good option for you.
If you have $5 million to $500 million, then talk to Hutch or Chris at Pillar Wealth Management. They bring together 60+ years of combined experience in wealth management for high net worth portfolios.
Tip 2 – Check the services offered by the wealth advisor. Make sure that your priority areas are included in the list of services. For example, if you are passionate about philanthropy, then make sure that the wealth advisor has expertise in that area in-house.
Tip 3 – Ask the wealth advisor about the fee structure. We believe that a fee-only model is the best one. It ensures that there are no “vested” interests.
There are no commissions or kickbacks which may lead the advisor to recommend certain products that aren’t really in the best interests of the client. The incentives of the wealth advisor for ultra high net worth individuals should be completely aligned with the interests of the client.
Tip 4 – Study the credentials and background of the wealth advisor. This might sound obvious but many people don’t do this part correctly.
Credentials aren’t just limited to qualifications like a CFA, MBA, or a CFP. It is about going back further and looking at the educational qualifications, the institution from which the advisor graduated, and checking LinkedIn profiles to know the career progression of the advisors.
Tip 5 – In order to check the track record of a wealth manager, you can get in touch with the Financial Industry Regulatory Authority (FINRA). They maintain records of any issues or actions taken against unethical wealth advisors.
You can cross-check any memberships to organizations or non-profits that a wealth manager claims in your meeting with him/her. After the meeting, you can go back and check with the cited organizations directly to find out if they are being honest.
Tip 6 – Ask the wealth advisor about the kind of clients that they have worked with in the past. As an ultra-high net worth individual, you don’t want to work with any average advisor. You want to work with someone who has helped sell properties for celebrities and entrepreneurs, or someone who has appeared in high profile tax cases as a witness.
You want someone who understands the multiple scenarios that can unfold when dealing with a high net worth portfolio. If you have $10 million or more in liquid assets, then read this guide on choosing the best wealth advisor.
How to work with PillarWM Wealth Advisor
Now that you have a good understanding of what a wealth advisor does, what the differences are between a financial advisor and a wealth advisor, and what benefits a wealth advisor can bring for you, the next logical step is to find an experienced wealth advisor for ultra high net worth portfolios to work with.
If you are wondering how to work with PillarWM Wealth Advisor, then the process is really simple. All you have to do is get in touch with Hutch or Chris and schedule your free consultation.
Hutch Ashoo and Chris Snyder bring together more than 60 years of combined experience in providing holistic wealth management services to clients with investible assets between $5 million and $500 million.
If you have $5 million or more in liquid investible assets, then we are a perfect fit. To become familiar with our philosophy, we encourage you to download our guide on choosing the best wealth advisor.
Pillar Wealth Management is a fiduciary. It means we are bound by law to provide advice that is in the best interests of our clients. We work on a fee-only model and are not incentivized by anyone to recommend any specific product or service for our own profit.
Our advice is unbiased and we make it our goal to ensure that we not only grow your wealth, but save you at least $100,000 per $10 million. We believe that saving money is like putting money in your pocket and it is as important as growing money.
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.