3 Ways Ultra High Net Worth Individuals Are Different – the Foundations of Wealth Preservation
You’re different. As an ultra-high net worth individual, your financial picture, life goals, how you spend your time, what you need, and what’s important to you differ radically from everyone else, including high net worth individuals who have under $10 million in net worth. You can download the ultimate guide for investors with $10+ million liquid investable portfolios here.
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There are at least three distinct differences that set you apart from everyone else, and these have a profound impact on how you will manage your investments, create estate plans, minimize taxes, and allocate your assets to protect your wealth from sudden market crashes. In addition to the quick introduction to all this that you’ll find in this article, we have explored these differences in great detail in our signature work, 7 Secrets to High Net Worth Investment Management, Estate, Tax and Financial Planning, you can get your free copy here.
At Pillar Wealth Management, we work exclusively with high net worth, as well as ultra-high net worth investors with $5 million to $500 million in investable assets. If you are looking for a qualified team of wealth managers, click here to book a free consultation with us.
Getting back to the topic at hand, it is essential to understand the difference between high net worth and ultra-high net worth individuals.
This difference is important for several reasons when it comes to financial planning. Here are three of them:
Higher Wealth Demands Greater Customization
At least – it should. If you have $10 million in liquid assets, your investment plan should not be lumped in with people who have less than 1% of your net worth. And to be clear, this is not about being ‘better’ than people with less money. It’s simply a reality:
With great wealth comes great complexity.
You need customized investment planning. If you don’t get it, you put your assets at unnecessary risk. The scale of loss you face if you put your assets at risk far outweighs that of others. For example, suppose two investors lose 33% of their portfolio values in a market crash, such as the one caused by the coronavirus.
An ultra-high net worth investor who had $75 million will lose $25 million. A more typical investor who has $200,000 will lose $67,000. Now, losing $67k is no picnic if all you have is $200k, so let’s not minimize that. But losing $25 million simply does not compare. This is generational money and is no joke. To learn more about how a wealth manager can prevent this from happening, order a free hardcover copy of our book, The Art of Protecting Ultra-High Net Worth Portfolios and Estates – Strategies For Families Worth $25 Million To $500 Million.
By the way, an ultra-high net worth investor should not be exposed to this much risk, but cookie-cutter big banks, Wall Street and discount brokers have lead us to write this story to warn and educate ultra-high net worth families from the devastation such losses would inflict. At Pillar Wealth Management, we utilize a variety of techniques that can secure your portfolio. To learn about this, click here to read our guide on how to improve portfolio performance.
We’ve seen investors lose as much as 80% of their wealth in market crashes due to poor financial planning. The stakes for high net worth and ultra-high net worth households are too high. Customized financial planning – based upon your goals and preferred lifestyle outcomes – offers the greatest potential for long term financial stability.
Very few financial advisors offer customized financial planning, even to ultra-high net worth investors. That’s why it’s in your best interest to talk with someone who does both: expertly advises high net worth clients AND offers custom wealth planning services.
To understand the importance of custom wealth management in more detail, we recommend reading our guide on the 5 essential shifts on how to improve portfolio performance.
A call to Hutch Ashoo, CEO and Co-founder of Pillar Wealth Management may be in order. Our firm does nothing but custom wealth planning for high and ultra-high net worth investors.
Higher Wealth Means Greater Need for Additional Services
Many wealth managers set minimum requirements on who they will work with. Pillar Wealth Management requires a $5 million minimum. Why? Part of the reason for these requirements is because the array of services increases with greater wealth.
For instance, as part of our across-the-board fee of 1% (reduced for $10+ million clients), here is a sampling of our white glove service, provided at no extra charge:
• Coordination of estate planning that minimizes taxes and protects assets from creditors
• Quarterly updates, rebalancing, and portfolio adjustments
• Friendly humans answer your calls or call back the same day
• Insurance advice or counsel
• Trustee selection & family governance assistance
• Tax planning coordination with your tax advisor, accountant, and other key members of your team
• M&A assistance for businesses
• Manage family business succession
• Help with debt consulting (lines of credit, mortgages, etc)
• Assist with college education planning (such as 529s)
• Set up assistance with aging parents and care-giving
If we worked with anyone and everyone, it would dilute the quality of our service and inhibit our ability to devote the extra time these services demand, for our higher net worth clients.
If you are interested in learning about how to find a financial advisor that can offer you this approach, click here to read our guide.
Knowing Your Worth Clarifies Your Goals
If you have $25 million upon retirement, you might set a goal to have $70 million remaining when you die so you can pass on an ultra-high net worth legacy.
Knowing your goals determines the customized investment plan you’ll use to reach these goals, and it will direct you to the additional services you’ll need to make it happen.
Do you see how all three of these reasons relate to each other? This is what it means to be ultra-high net worth. The farther up that scale you go, the more services and customization you need to achieve your expanding set of goals and lifestyle dreams. If you have over $10 million in liquid assets, then click here to download our guide on finding a financial advisor that offers a high level of customization.
As a rule, Pillar Wealth Management only accepts those clients that understand the difference… that appreciate the value of a custom wealth management plan for their assets. If you do, or you just want to know more about what a custom wealth plan entails, maybe a call to Hutch Ashoo, CEO and Co-founder of Pillar Wealth Management is in order.
With his 30+ years of experience, Hutch can explain exactly how a custom wealth plan is not just created but modified over time according to changing circumstances.
We encourage you to call Hutch. As a high or ultra-high net worth investor, your portfolio… your family… your legacy may depend on it.
Ask Pillar Wealth Management for Help Clarifying and Achieving Your UHNW Goals