Welcome to Hoxton Wealth, the new home of Hoxton Capital

Financial PlanningOctober 28, 2024

What Makes a Good Wealth Management Strategy?

Hoxton BlogWhat Makes a Good Wealth Management Strategy?

  • Financial Planning

Finding the right wealth management strategy can be like finding the perfect home. Something that ticks all the boxes for one family, could be a disaster for another. The key to a good wealth management strategy is understanding what it is you’re trying to achieve, and then building a plan around that.

No matter what those specifics look like, there are some essential fundamentals that go into any good wealth management strategy. Understanding this is essential for building, growing, and preserving your wealth over the long term. 

In this article, we’ll walk you through the core components of wealth management and what makes a strategy effective and sustainable.

What Is Wealth Management?

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.

  • Income and expenses planning

    This is where it all begins. Understanding your income and expenses helps you set aside money for savings and investments, while still allowing you to enjoy your life now. A well-managed income and expenditure picture ensures that you're living within your means and preparing for future goals.

  • Savings

    Building up your savings is crucial to creating a financial safety net. Whether you’re setting aside funds for an emergency or planning for a big purchase, regular savings are a cornerstone of wealth management.

  • Investments

    This is where your money starts working for you. Investing in stocks, bonds, or property allows you to grow your wealth over time. A solid investment plan is key to achieving both short and long-term financial goals.

  • Retirement planning

    It's never too early to start planning for retirement. A good strategy ensures that you’re saving enough to enjoy it comfortably. This involves choosing the right investment accounts, like SIPPs, 401(k)s or other pension and retirement accounts, and determining how much to contribute regularly.

  • Tax planning

    Investment returns play a big part in your long term wealth, but tax is arguably the most important aspect. Even for those who live in low or no tax jurisdictions, like the UAE, it’s important to understand the tax implications of overseas assets, and worldwide taxes such as inheritance tax in the UK.

  • Life assurance and legacy planning

    Managing wealth isn’t just about building it up for yourself. It’s also about securing it for your family and future generations. Life assurance and estate planning help ensure that your wealth is passed on smoothly to the next generation.

Defining Your Wealth Management Guidelines

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.

The Details of a Good Wealth Management Strategy

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.

The Importance of Finding the Right Wealth Manager for You

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.

Build Your Wealth Management Strategy With Confidence

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. 

How Can We Help You?

If you would like to speak to one of our advisers, please get in touch today.

“I have had a great experience with Hoxton capital. Izzy was really supportive an...”

Carl

16, August

“My experience was great.
People took time to explain. There was no pressure. ”

Andrew Glossop

15, August

“From the beginning of our relationship, Hoxton guided us all the way, supporting...”

DazMac

11, August

“The Professionalism and Dedication of Jack Reed and the Team. Jack Reed is an exemplar in the field of financial advice and wealth management...”

Mann, Sam

09, August

About Author

Hoxton Wealth

October 28, 2024

Contact Hoxton Wealth

Contact us today to discover how Hoxton Wealth can help you achieve your financial goals. Together, we can build a brighter financial future.