Your Wealth is Much More than a Portfolio

Your Wealth is Much More than a Portfolio

Throughout my career as a wealth advisor, I’ve seen too many clients who make a common mistake:

They don’t quite grasp that difference between their portfolio and their wealth.

In fact, they often see these as one and the same.

Obviously, there is a strong correlation between your wealth and the performance of the stocks, bonds, and assets that you hold.

But you certainly can’t draw a full picture of your wealth from the numbers on your balance sheet alone.

As individuals move into higher stratospheres on the wealth spectrum, their finances grow increasingly complex, perhaps including multiple real estate properties and alternative investments.

The widening scope of these holdings underscores the reality that many high net-worth individuals need more than just portfolio planning or guidance on minimizing their tax obligations – they need full-service wealth management that helps them to make their lives much easier.

And this advice needs to take into account all of the values that clients care about when it comes to their money, how they spend their time, and their loved ones.

Perhaps their primary concern isn’t driving up returns or ruthlessly protecting their principal – perhaps they are most concerned with the social impact that their charitable giving can make.

Or perhaps they are focused on maintaining particular real estate properties that generate valuable memories of time spent with loved ones.

For most successful individuals the more complicated their life becomes the more they realize the value of having a single manager to keep everything in order. They assign a manager for different projects or portfolios, but typically there’s not a single individual helping to oversee the entire set of assets. For this reason individuals typically are overexposed to risk and under utilize tax strategies available to them.

These peculiarities help illustrate why your relationship with your wealth manager should not be an occasional transactional exchange. The most successful partnerships are rooted in both parties investing the time to form a real relationship, in which the wealth manager fully understands where the client is coming from and what they hope to gain.

A deep understanding is essential to wealth management due to the emotional dynamics that help us make decisions. Without trust and genuine caring, it’s unlikely any partnership will last long.

And so, it’s incumbent on you to ask yourself – what does wealth mean for you?

It will take some deep personal reflection and time to come up with the right answer.