Wealth Manager: The #1 Factor for Choosing The Right One

Next to your spouse and kids, your wealth manager is the single most important person in your life, especially for families with ultra high net worth. That’s not an exaggeration or a joke.

If you aren’t sure why that’s true and if you have $5+ million investable assets, take a look at the 7 Secrets to High Net Worth Investment Management, Estate, Tax and Financial Planning, it is one of the most important and revealing free guide we’ve ever produced.

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.

Think about those terms:

Investment management. If you have an eight- or nine-figure net worth, you have a lot to lose and a lot to gain based on how your investments get managed (or get neglected).

Estate planning. What you do now – or don’t do – will reverberate for generations after you’re gone, and not just in your own family. Planning now to produce a generational legacy that secures your family and makes the world a better place isn’t something to ignore until you’re 80.

Tax planning. The amount of money ultra high net worth families stand to lose from all sorts of taxes before, during, and after retirement (yes – after death) is staggering. Tax minimization planning is therefore a lifelong pursuit.

A wealth manager drives all these tasks and works tirelessly to ensure your lifelong success and financial security. Again, get your free copy of 7 Secrets to High Net Worth Investment Management, Estate, Tax and Financial Planning to see what elite level wealth management can do for you.

Encompassing all three of these pursuits is one overarching, single issue that matters more than any other when finding and choosing the wealth manager you want to entrust with your family’s financial prosperity and security. We’ll get to that later, because you have to understand a few things first.

The first thing to understand is, what is a wealth manager? How is a wealth manager different from a financial planner, financial advisor, money manager, investment advisor, or any other financial or investment specialist?

Your goal today is to answer three questions:

1) What is a wealth manager, and how is this person different from all these other advisors and planners?

2) Which one do I need?

3) How do I find the one who’s right for me?

Answering the first two questions is relatively simple, so let’s begin there.

What Is a Wealth Manager?

A wealth manager is a financial advisor who caters to high-net-worth individuals and families. They provide personalized advice in all areas of financial planning. Through an open and trusting relationship with a client, the wealth manager is able to understand the client’s personal and financial circumstances.

The manager will assess the client’s short- and long-term goals. They can apply that knowledge to the development of a financial plan, which will cover advice and recommendations for investing, retirement planning, philanthropy, insurance, and tax and estate planning.

What Does a Wealth Manager Do?

A wealth manager provides a wide range of financial advisory services for wealthy individuals.

A wealth manager will work with a client to develop a financial plan that aims to achieve the client’s financial goals, both short- and long-term. The manager can deliver the following services, among others:

1. Investment management
2. Tax mitigation
3. Estate planning
4. Managing charitable giving and foundations
5. Debt management
6. Retirement planning
7. Bank accounts and credit cards

A wealth manager recommends an investment portfolio aligned with the client’s goals and values. The manager is responsible for monitoring the portfolio’s performance and rebalancing it as needed. Through regular contact with the client, the manager can re-evaluate the portfolio to account for any significant changes in the life of the client.

Who Typically Works with a Wealth Manager?

A wealth manager works with individuals who have a significant amount of wealth, with a net worth of at least $1 million.

It’s typical for a manager to expect their clients to have investable assets worth in excess of $750,000. These minimums vary among investment and wealth management firms. A look at their website or the first contact with a wealth manager or firm will clarify this point for you.

How to Choose a Wealth Manager

Once you establish the account minimum required to work with an advisor, you can focus on whether the advisor can provide the services you need.

You should ask the advisor about their background and certifications, which you can verify online with FINRA or the SEC. Find out about their typical client. Ask about their investment approach.

After your initial conversation, you will know if this advisor is someone you are comfortable with.

Wealth Managers vs. Other Types of Financial Advisors

There are various types of financial advisor—a wealth manager is just one of them, who happens to work with wealthy clients. These clients often have complex financial needs. Advisors who don’t specialize in wealth management will work with a broader customer base.

Most financial advisors offer a similar basket of products and services, although they may have a specialty. It’s typical for an advisor to require a minimum amount to open an investment account, and charge a percentage of the account’s value as a fee.

How Is a Wealth Manager Different?

‘Financial advisor’ could be thought of as the catch-all umbrella term under which all the other terms rest, except for money managers, a much more narrowly defined skill set, which we’ll discuss in a moment.

All wealth managers are financial advisors, but not all financial advisors are wealth managers. They have two distinct differences.

First, wealth managers (or wealth advisors – these terms are basically interchangeable) only work with high net worth and ultra-wealthy individuals. This usually means a minimum amount of investable assets, such as $1 million, but minimums vary. Pillar’s minimum is $5 million. Talk to us about getting a customized wealth management assessment.

Second, they have a specialized understanding of the unique financial challenges and decisions faced by high net worth clients.

Therefore, how much money you have in liquid assets is your first consideration in deciding what kind of financial advisor you need.

If you’re a high net worth family or individual, you want a wealth manager to give you a wealth management service. You have unique needs when it comes to money. You will face complex questions that most people do not face. You will need help with things other people don’t even have to think about. You are concerned as much with protecting your wealth as you are with continuing to build it, which is why we wrote this book about what it takes for ultra-high net worth families to protect their wealth.

These specializations, in general, are less strong in typical financial planners and advisors.

What Extra Services Do Wealth Managers from a Wealth Management Firm Offer?

All financial advisors deal with various aspects of their clients’ money. The more elementary types of advisors use the majority of their efforts on your investment advice and retirement planning. Their main goal is to increase your portfolio and build wealth. The wealth management firms may offer some additional wealth management services of expertise that either they possess themselves or that someone on their team does.

These areas of expertise may include:

1. Accounting and tax services plus strategic planning

2. Retirement planning

3. Legal planning

4. Estate planning

5. Risk management

6. Trust services

7. Credit cards

8. Banking services

9. Philanthropic planning

In most cases, a wealth manager will not consider these additional services of a wealth management optional. For most of their high net worth clients, these will be essential services at some point in their life, and the process of navigating the issues that will arise in each of these categories is complex.

For instance, high net worth people face unique tax situations on a host of fronts that average people don’t deal with. They often must work through complex business and real estate income scenarios. They need help minimizing their taxes, which gets more complicated with age, even if they’re no longer working. The estate planning questions they must answer are far more intricate than for average people.

For high net worth people, retiring usually isn’t as simple as just ‘calling it quits’ and relaxing on the back porch. This is one of 5 critical shifts to maximizing your portfolio’s growth and security. See all 5 in this free guide.

A wealth manager like Pillar comes alongside and helps them with all parts of their financial lives. The wealth advisor is an ally, a member of the team, and when they succeed, they accomplish much more than just increase your investment returns. That’s just the first step of your benefits as an investor.

The Many Hats of a Wealth Manager

Wealth managers wear many hats. On any given day, they might be an investment planner, a consultant, an advisor giving counsel about a big decision, a data-cruncher, a retirement planner, a fixer of someone else’s costly mistakes, a locator of resources and specialized expertise, or a financial troubleshooter who looks at the client’s financial situation and make sure to finds ways to refine and improve it.

In other words, the wealth manager reduces the complexity of life that their clients would otherwise have to grapple with on their own. The wealth manager can help you not have to worry.

How Wealth Managers Differ from Money Managers

Money managers occupy a very different space than financial planning advisors. For example, the people who run mutual funds are money managers. They don’t deal with clients. They focus exclusively on the pool of money that individuals, businesses, charities, and governments have entrusted them with.

So what is the connection between a financial advisor and a money manager? The advisor allocates their client’s money across a variety of investment vehicles in an attempt to achieve the performance goals desired by the client. If that advisor puts some of your money in a fund that is managed by a money manager, that’s the connection. The money manager charges a fee, which the advisor will, in effect pass on to you.

Let’s talk about those fees for a bit.

What Kinds of Fees Do Wealth Managers Charge?

The general ballpark figure for most wealth managers’ fees is about 1% of your invested assets. So the wealth manager’s fee is rarely a reason to pick one manager over another. But take note: This is for fee-only wealth managers.

A fee-based wealth manager, on the other hand, may also earn commissions by selling you various products such as mutual funds, insurance, annuities, and equity packages. The same is true with all the other terms, like financial planners, guides financial advisors, investment management, and investment advisors. They can be fee-only or fee-based. It’s a big difference.

Some might even earn most (or all) of their income from these commissions. You might get told by an advisor that they charge no fees at all. Well, they have to eat. Any advisor who claims they charge no fees is likely earning commissions instead. There are other methods of getting paid as well, but this is just an overview.

The key takeaway here is, fee-only is very simple to understand, and fee-based is more complex and more likely to include hidden charges and extra costs, especially if they are shady third-party wealth management. Pillar is a fee-only wealth manager, with a sliding scale based on the total assets under management. Talk to the co-founder.

How Do I Find the Wealth Manager Who Is Best for My Situation?

You’ve already seen a few considerations.

1. Investable Assets

If you’re not a high net worth individual, you will likely want to find a financial planner or advisor, not a wealth manager. If you have over $1 million in liquid assets, a wealth manager like Pillar will likely serve your needs better than a typical advisor.

See 7 reasons why you need a financial advisor.

2. Fee Structure

Do you want the simplicity and clarity of the fee-only approach, do you prefer the fee-based approach, or does this not matter to you?

3. Extra Services

If you have a high net worth, you probably will need most of the extra products and services offered by wealth managers at some point in your life. But some offer more of these services than others or may be strongest in the specialties most pertinent to your situation. If you have a large number of real estate holdings, for instance, you might need a wealth manager who specializes in real estate finance.

Pillar doesn’t charge anything for any of our extra services. It’s all included in the simple fee for our clients’ best user experience in using our wealth management services.

4. Cost

The amount of money you’ll pay in fees, as well as taxes and other costs, can add up to hundreds of thousands more with one wealth manager compared to another, especially if you work with them for many years.

This is why working with a wealth manager who believes in passive management over active management is one critical decision that high net worth clients must consider making. The fees a wealth manager pays for passive investments are far less than what they will pay an active money manager to invest their clients’ money and try to beat the stock market.

See why outperforming the stock market is the wrong goal.

The Most Critical Issue When Choosing a Wealth Manager for High Net-Worth Individuals

Your most critical issue is not investment performance. It’s also not all the extra services the wealth manager might offer. Both of those are extremely important, so this is not an attempt to minimize them.

But what matters more than anything else is the wealth manager’s process for adjusting your financial plan on an ongoing basis, as your life situation changes and as the world changes around you. This is the secret to optimizing your performance.

How does your wealth manager align your financial goals and long term hopes with the plan they develop for you? Just as important, how do they keep that plan continually aligned, month after month, year after year? (See how Pillar does this)

These are BIG questions, and we don’t have space here to do them justice. But here’s the gist:

You want your investments to grow. You want to see growth. Of course. But more than that, you want to have security and stability. You want to know that as you plan and prepare for retirement, enter retirement, and live out retirement, that your money will not run out and that you’ll achieve all the financial life and lifestyle goals you set out to achieve.

That’s what matters most.

What Is a Wealth Manager and How Do I Find One?

A wealth manager has a large understanding and function since real humans handle it with in-depth knowledge, experiences, and skills in managing wealth for the ultra-high-net-worth individual. If you want to use the less expensive tools or features for your financial matter, you can use several tools such as life insurance calculators, home buying calculators, guides student loans calculators, reviews banking calculators, or guides refinance/refinance calculators.

Make sure you read any reviews or opinions to get a neutral perspective, same as if you read the bank reviews before opening bank accounts or reads rate lender reviews, you have to be fully conscientious and neutral. If the wealth manager is well-known, then he/she probably has written articles or blogs for mainstream media.

To find the best wealth management firm, you can use the two methods in this case. First, you can use the internet as a medium in the searching process. As a simple explanation, the procedures can be described as: find some guides-search-tap the profile icon.

Finding some guides can be described as the process of collecting information on the internet. The credible and renowned wealth management firms provide articles that you can use to find what is suitable for your financial needs. You can also use their site and read their values, principles, and experiences.

It is similar to reading and searching the bank review before making a bank account for a particular bank. You should carefully select the wealth management firms with patience and position yourself in the middle, away from any perspective. Once you find one, you can directly find their website, tap the profile icon, and contact them for consultation or making an appointment.

The second way is by leveraging your colleague or family. This is the best way because most of the respondents have used the service at least once or get the information from their colleagues about the wealth management firm mentioned.

If you are high-net-worth individuals with $5 million to $500 million in investible assets. You don’t have to waste your time to find one since you already find the best here at Pillar WM.

Get our Ultimate Guide to help you make this critically important decision.

Get our Ultimate Guide to help you make this critically important decision.