What Makes a Good Wealth Management Strategy?

At its core, wealth management is about looking after your financial well-being. It’s about managing your money in a way that allows you to live the life you want. It can include a broad range of individual services, such as saving, investing, tax planning, and planning for retirement. 

If we’re going to dig into what makes a good wealth management strategy, we need to start with the fundamentals of what it should cover.

With a broad overview of all the different aspects of a good wealth management strategy, the next step on creating the right one for you is to put some parameters around it. This is the big picture outline of what you’re working towards and what you’re working with.

Goals

Most obviously, what are you trying to achieve? Are you saving for a new home, your children’s education, or retirement? Defining clear, actionable goals will make it far easier to choose the right investments to match.

Timescales

How long are you planning to invest? Your investment timeline will influence how aggressive or conservative your strategy should be. Short-term goals might require safer investments, while long-term goals can allow for riskier, high-reward investments.

Dependencies

Your financial strategy might depend on other factors, such as your job stability, health, or any debts you’re carrying. Consider these factors when putting your plan together, as they can impact your ability to save or invest.

Once you’re clear on the big picture, you need to get down to the details. A good wealth management strategy needs to take into account not just your long term aims and objectives, but the tactical decisions needed to reach them.

Diversification

Diversification within your investments is a fundamental requirement for a good wealth management strategy.

A diversified portfolio that includes different types of investments — such as stocks, bonds, property — reduces risk and increases the potential for steady returns over time. It’s important that this portfolio isn’t simply a one-size-fits-all proposition. It needs to be tailored towards your objectives and your attitude to risk.

Short and long-term outcomes

We mentioned goals in the previous section, but now is the time to get specific. And we’re not just talking about big, long-term goals like saving for retirement. 

A good strategy delivers on both short-term needs, like building an emergency fund or saving for a holiday, and long-term goals, such as funding retirement or leaving an inheritance for your children.

Tax Considerations

Understanding the tax implications of your financial decisions is crucial. Often, tax planning is the first step of the tactical aspects of your financial plan, as it’s possible to tailor most investment strategies within the majority of tax-advantaged accounts, such as ISAs, pensions 401(k)s and IRAs.

A well-planned strategy will help minimise your tax burden, allowing you to keep more of your hard-earned money and increasing your net returns.

Inheritance and estate planning

The right wealth management strategy should also include plans for passing on your wealth, whether that’s to your surviving family members, causes and organisations you’re passionate about, or a mixture of both. 

Proper estate planning ensures that your assets are distributed according to your wishes and in the most tax-efficient way possible.

A good wealth management strategy isn’t just about the facts and figures. It’s also about the right relationships. For investors looking to partner with a financial advisor, a closer relationship will lead to more honest and authentic conversations, which can result in better long term results.

That’s right, having a great relationship with your financial advisor could actually result in an improved retirement outcome. But not all wealth management services are created equal, and not everyone will be ready to work one-to-one with a financial advisor. 

Here are some of the options to consider:

Adviser-led

Traditional wealth management services involve working with a financial adviser who helps guide your decisions. This is ideal for those who prefer personalised, expert advice. Over time, you can build up a level of trust with the financial advisor and their team that you’ll never be able to achieve without that personal connection.

App-led

Some investors prefer using wealth management apps to manage their finances independently. These apps provide a range of tools to help you track your investments, set goals, and adjust your strategy on the go.

Hybrid

A hybrid approach combines the best of both worlds — giving you access to a financial adviser when you need it, while also allowing you to use a financial app for day-to-day management. 

The Hoxton Wealth App has been designed for this exact purpose, connecting all your assets in one place, allowing you to visualise and track your net worth, and project your route to financial independence with WealthFlow.

A good wealth management strategy is all about finding the right balance between managing risks and growing your wealth. By setting clear goals, diversifying your investments, and planning for both the short and long term, you can build a solid foundation for your financial future. 

Whether you’re new to investing or looking to fine-tune your current strategy, Hoxton Wealth offers tools like the Hoxton Wealth App and expert financial planning services to help you stay on track.