Why Are Investments Not Enough As Per The Wealth Managers?

By Daniella Rand

If you’re like most Americans with steady, salaried jobs, you probably have access to an employer-sponsored retirement plan. You’re legally entitled to an Individual Retirement Account (IRA), and possibly to a Roth IRA as well. And, of course, you’re free to open a self-directed brokerage account at any time.

Your wealth management strategy is in good shape, then?

Not quite. All experienced wealth managers advise their clients that, actually, investments aren’t enough to form the basis of a complete, resilient wealth management plan. More is required.

Daniella Rand

Components of a Comprehensive Wealth Management Strategy

These five components form the basis of a comprehensive wealth management strategy. As we can see, investments aren’t enough — you’ve got to cover all your bases. How many do you have locked down already?

 

  • A Thoughtful, Customized Retirement Plan. Your retirement investing strategy starts with — what else — a thoughtful retirement plan customized to your unique goals, needs, and tolerance for risk. When you begin working with your financial advisor, you’ll talk through your long-term plans and goals, take a risk tolerance assessment, and complete other steps necessary to create a fully customized plan.
  • An Active Investment Management Strategy Designed to Outperform the Market. Passive investing strategies are designed to match the broader market. This is fine, if that’s all you’re after. But why wouldn’t you want to enjoy maximum upside potential? An active management strategy is key here; look for a financial advisor with experience designing and implementing such strategies.
  • Tax Minimization Strategies That Leverage IRAs and Other Instruments. The only sure things in life are death and taxes, but that doesn’t preclude you from taking every legal step to minimize your tax burden and preserve more of your wealth. Talk to your financial advisor about using tax-advantaged instruments like IRAs, 529 education savings accounts, and health savings accounts to protect what’s yours.
  • A Flexible Retirement Income Strategy. Do you know how much income you’ll need to preserve your lifestyle in retirement? Your financial advisor can help you figure this out while designing an income strategy that protects your wealth and preserves upside potential.
  • Multiple Forms of Insurance. Most investors need life insurance, which provides a safety net for loved ones in the unfortunate event of the policyholder’s premature death. Everyone needs health insurance, which covers the cost of needed medical care (and may prevent financial ruin after a serious illness or injury). Disability insurance is important for working-age investors, as well. Your financial advisor may recommend other forms of insurance, too. Once they’re in place, you’re sure to sleep better.

 

What Is Your Wealth Management Strategy Missing?

If your wealth management strategy is missing any of these components, don’t lose hope. To get back on track, reach out to an experienced financial advisor or wealth management team. The conversation won’t be as painful as you imagine, and in short order, you’ll find yourself in a far more confident position vis a vis your personal finances.

A secure financial future is calling your name. Are you ready to answer?