Hemant P. Singh, founder of the New York-based independent financial advisory firm Private Wealth Management LLC, counts among his clients some of the key movers and shakers in the entertainment world today–a glitzy, high-flying world where vast sums of money can be and are made overnight, but also one in which fortunes can be squandered in the blink of an eye.
“The industry standard has been that without the right financial advice and management, peoples’ money has just gone without their knowing how it went,” says Singh, who founded PWM in 1997.
As advisor to the likes of Reggie “Syience” Perry, a 26-year-old music producer and overnight sensation who with just one hit song on the recent album of rap legend Jay-Z, is an instant millionaire, and Chris Lighty, CEO of Violator Management, a superstar in the music business world who manages the careers of artistes like 50 Cent, Sean “P Diddy” Combs, Busta Rhymes, and Missy Elliott, Singh’s mandate is to preserve the vast amounts of wealth and make them grow such that they last well into the future.
“I ask my clients to recognize how fortunate they are to be in the position that they are in,” Singh says. “I make them conscious of the fact that for what they have achieved in such short periods of time (as a result of their talent and hard work), the reverse can be equally true. While I’m not going to stop them from living the lifestyles that they do, I am going to try to get them to manage their money better.”
For his hip-pop clients and for the other, more mortal people whose money he manages, retirement planning is a key part of Singh’s mandate. Whether it be for an uber-wealthy person or one who, relatively speaking, does not have as much, preparing for tomorrow by looking at what one has today is crucial, he says, and a large part of that is providing holistic advice.
How to financially ensure for tomorrow, depends, of course, on an individual client’s wealth profile. Taking a few hundred thousand dollars and buying an annuity, for instance, works well for someone who makes a couple of million dollars a year, Singh says.
“When someone is bringing in so much money annually, it is easier to put away portions for the future,” Singh says. “I am particularly keen on doing this for clients who don’t have regular retirement accounts or pension plans.”
But the bottom line of Singh’s retirement planning strategy is to create alpha for all his clients, regardless of their financial status. To this end, constructing portfolios that protect on the downside and are not totally dependent upon market ups and downs is key for anyone, he says.
“We can’t control the markets from doing what they will do, but we can prepare ourselves by having alpha-structured portfolios that allow us to survive the rain,” Singh says.
Creating alpha means having to manage actively. Singh includes in such portfolios income-generating vehicles that may run the gamut from structured products to options and other derivatives to hedge risk while generating additional income.
He is also big on theme-driven funds for retirement account portfolios, for the compounding returns they can generate over time. “Creating income in addition to growth and having this total return compound over time is a powerful combination toward having a successful retirement,” he says.
Many of Singh’s retired clients use the income generated by their portfolios to pay income taxes and to finance their retirement. In this way, “we do not invade the principal, and the funds are fully invested for the future.”
But money management aside, one of the most important facets of Singh’s approach to advising is to really get to know his clients and their lifestyles.
“Since I provide holistic financial advice, I think it’s very important to be a part of my clients’ lives,” he says. To that end, he flies out to where his clients are performing, for instance, and makes efforts to meet them on the road. Getting clients to accept him as an unbiased source of information is also very important to Singh, particularly for clients who are not so involved in the day-to-day management of their finances.