Financial Planning
May 21, 2024

4 Surprising Principles of Modern Wealth Management

Stewart Willis

The idea of modern wealth is just another way of saying that money and assets aren’t enough anymore. Being genuinely wealthy means having your fingers in various pies like investments, digital assets, sustainable funds, etc.

Modern wealth management reflects how the global economy has shifted with the rise of green investing, technology, and the transfer of wealth. The definition of modern wealth has expanded to keep up with the times, and it’s not just about stacking cash or owning property anymore.

Principles Guiding Modern Wealth Management

Look, modern wealth management isn’t just about making more money—it’s way more nuanced than that. It’s about mitigating risks, ensuring your wealth lasts for generations, and aligning your investments with your personal values and beliefs. Here are a few fundamental principles that really define this field:

1. Holistic Approach

If modern wealth management goes beyond accumulating wealth, shouldn’t the range of services go beyond traditional management? It’s not just about your investments anymore. Wealth managers have to look at the bigger picture—taxes, estate planning, and even how you’re spending your hard-earned cash.

This panoramic approach ensures that every aspect of your finances is in sync and working towards the same goals. For example, the use of trusts and modern wealth management allows families to maintain control over their financial legacy while addressing the legal and tax implications.

2. Personalization

Modern wealth managers can get up close and personal, tailoring portfolios to each client’s unique preferences and risk tolerance. Bespoke portfolios are no longer a luxury reserved for the ultra-wealthy—they’re becoming the standard. More clients want highly personalized services and will seek advisors who treat clients as individuals, not just numbers on a spreadsheet.

3. Sustainability and Ethics

More investors realize their money should do more than make them richer. They want their investments to positively impact society and the environment, too. That’s where ESG investing comes in—it’s all about putting your money into companies doing good for the world, not just their bottom line.

Modern wealth managers are getting on board with this, realizing that sustainability isn’t just a buzzword. It’s a smart way to invest for the long haul. Ultimately, we all want our money to grow, but it’s even better if it can grow while making the world a little bit better.

4. Adaptability

The financial world can feel like a rollercoaster ride influenced by tech breakthroughs, political upheavals, and economic ups and downs. Modern wealth management isn’t about sticking to rigid plans. It’s about staying agile and adapting your investment strategies on the fly based on what’s happening in the markets and economies worldwide. Flexibility is key when the game keeps changing.

Modern Asset Allocation for Wealth Management

Modern asset allocation for wealth management refers to how an investor distributes investments across asset classes like stocks, bonds, and real estate. The goal is to optimize the balance between risk and return based on an individual's financial objectives, risk tolerance, and investment timeline.

Effective asset allocation for wealth management helps in:

  • Risk diversification involves spreading investments across different asset classes, regions, and sectors to reduce the risk of significant losses from any poor-performing investment.
  • Performance optimization is important because different asset classes perform differently under economic conditions. A good strategy can help capitalize on these differences to enhance portfolio performance.
  • Achieving personal objectives because they are tailored to your needs, whether retirement, buying a home, or leaving a legacy.

Current Trends in Wealth Management

Modern wealth management is changing for different reasons. These are some current trends in modern wealth management:

The Great Wealth Transfer

The ongoing transfer of wealth from the baby boomer generation to their millennial heirs represents a significant shift in the financial landscape. According to Deloitte, $58.1 trillion is expected to transfer between adult populations over the period from 2007-2061. As this massive wealth transition unfolds, millennials are possessing newfound resources that require thoughtful wealth management and strategic investment.

Millennials, having grown up with distinct values and priorities compared to their parents, are likely to approach this windfall with a different mindset. Rather than simply seeking to maximize returns, many millennials will prioritize ethical and socially responsible investment opportunities that align with their personal values. This focus on values-driven investing reflects a broader trend among younger generations to leverage their financial power to drive positive change and make a meaningful impact.

Two people working on financial documents next to laptop

New Investors with a New Mindset

With the rising increase of younger investors, there is new way they approach risk. Many may view risk as a downside rather than volatility. Wealth managers would need to go beyond traditional risk management tactics to approach this mindset.

Furthermore, baby boomer heirs may also seek more personalization and customization when managing their inherited wealth. Traditional one-size-fits-all investment strategies may resonate less strongly. They may gravitate towards more tailored, holistic approaches considering their unique financial goals, risk profiles, and long-term aspirations.

As this intergenerational wealth transfer continues to unfold, it will be crucial for heir to establish robust financial planning strategies that protect their newfound assets while aligning with their evolving values and investment preferences. This will involve working with financial advisors who understand and can cater to the specific needs and perspectives of the millennial demographic.

Technology-Driven Solutions

Emerging technologies like artificial intelligence and machine learning profoundly transform various industries, including the financial sector. Wealth managers rapidly analyze vast amounts of data to make more informed and strategic investment decisions on behalf of their clients.

Software for market currents in wealth management would allow for real-time tracking of global market changes, ensuring quicker response times to protect client assets. The rise of robo-advisors is another critical development.

These automated, algorithm-driven wealth management platforms make professional investment guidance more accessible to the general public. However, it's essential to recognize that technology-driven solutions can only go so far, no matter how sophisticated. Human expertise, intuition, and personalized attention will always be needed to manage complex financial portfolios and address the unique needs of individual investors.

Modernize Your Approach to Wealth

Let Asset Preservation Wealth & Tax help you create a financial plan that works in your best interest. Our team of advisors work with tax professionals, lawyers, and accountants to look at the bigger picture. Imagine the peace of mind of knowing our team is by your side to help you secure the financial future you want.

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Stewart Willis is the founder and president of Asset Preservation Wealth & Tax, a financial planning firm in Phoenix, Arizona. Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser.

The commentary on this blog reflects the personal opinions, viewpoints and analyses of the author, Stewart Willis, providing such comments, and should not be regarded as a description of advisory services provided by Foundations Investment Advisors, LLC (“Foundations”), an SEC registered investment adviser or performance returns of any Foundations client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment, legal or tax advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Personal investment advice can only be rendered after the engagement of Foundations for services, execution of required documentation, including receipt of required disclosures. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Foundations manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Any statistical data or information obtained from or prepared by third party sources that Foundations deems reliable but in no way does Foundations guarantee the accuracy or completeness. Investments in securities involve the risk of loss. Any past performance is no guarantee of future results. Advisory services are only offered to clients or prospective clients where Foundations and its advisors are properly licensed or exempted. For more information, please go to and search by our firm name or by our CRD # 175083.

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