What’s Included in Holistic Wealth Management?

For many people, the term “wealth management” is synonymous with investing. You turn to a wealth manager to provide investment advice and portfolio management with the goal of growing your wealth. But while investing is one of the best ways to grow your wealth for the future, focusing on only that may not be the best approach.

Why? Because over time, your financial security will be impacted by various aspects of your financial life. Holistic wealth management includes a plan to grow, protect, enjoy and distribute your wealth. In addition to investments, it also includes insurance and considers how you’ll reliably create retirement income during bull markets as well as in the middle of a recession.

Here are some of the key components of holistic wealth management, and how they interact with your overall financial plan.

What is holistic wealth management?

Put simply, holistic wealth management brings together all the pieces of your financial life to ensure everything works together in the most efficient way possible. This means that instead of focusing on one particular area of wealth management, such as investing advice or portfolio management, other components are considered as well. This might include saving, setting spending priorities, budgeting, and various forms of risk mitigation that all come together to offer a holistic vision of your wealth.

Your goals: Your advisor will work with you to understand the unique personal and financial goals you are working toward. For many people, saving for retirement is that the top of the list. But this is likely not the only goal you have — you might be looking to build a dream home, start a family, pay for college or a wedding, start or grow a business, go back to school, or change careers — or something else entirely. By understanding what’s important to you and what you want to accomplish in your life, your advisor will be able to build a financial plan that empowers you to reach your goals.

Growth: How you grow your wealth will be dependent on your personal financial situation. But doing so will almost certainly involve some form of investing. A holistic wealth advisor uses his or her understanding of your goals and risk tolerance to construct and manage an investment portfolio that aligns with your goals.

Protection: As you work to grow your wealth, it’s equally important to protect the wealth you’ve already accrued. Your emergency fund, insurance (including disability and life insurance), and tax mitigation strategy are all integral to this. Your advisor will guide you on how to position your wealth with investments, insurance, cash and other financial vehicles.

Distribution: This is a critical piece of wealth management, because at some point, you will want to use your wealth. A wealth manager can help you maximize your wealth as you distribute it by being strategic about where you withdraw funds and when in an effort to minimize taxes and shield you from other risks like market downturns.

Your values: Advisors who approach wealth management holistically want to know as much about you as possible. By understanding your personal beliefs, your advisor can recommend investment solutions that align best with your values.

Holistic wealth management brings everything together

Your wealth manager will create a plan that incorporates the individual pieces of your financial life, while also helping you understand how those pieces all work together. An example of this would be using the stable cash value of life insurance to help you be more aggressive with your investments, without putting your overall financial portfolio at risk. By having a comprehensive understanding, your wealth manager can provide recommendations and make adjustments to your portfolio and overall plan as necessary.