Are you ready to build a wealth plan that lasts for generations?
For high-net-worth individuals (HNWIs) and families, supporting your financial future and leaving a lasting legacy requires a well-structured, long-term plan. Whether it’s planning for retirement, diversifying your investments, or aligning your strategy with sustainable principles, the right approach can make all the difference.
Moran Wealth Management, an Independent Registered Investment Advisor based in Naples, Florida, offers advisory services and portfolio solutions to help clients navigate complex decisions. This guide outlines steps for building a plan that aims to support sustained, multi generational goals with attention to diversification, tax optimization, and the careful use of alternative investments when appropriate.
1. Define Your Financial Goals
The first step in building a long term wealth plan is defining your financial goals. For high net worth investors, these may range from funding retirement needs to creating a legacy for future generations or supporting philanthropy. Goals should be specific, measurable, and aligned with your broader objectives.
Moran Wealth Management emphasizes a Legacy Defining Plan, recognizing that a well-structured financial plan is central to safeguarding assets and guiding the distribution of wealth according to your wishes.
Ask yourself:
- What lifestyle do I envision in retirement?
- How do I want to provide for my family and future generations?
- Are there causes or organizations I wish to support during my lifetime and beyond?
By clearly outlining your goals, you can tailor your wealth strategy to meet those needs. A clear understanding of your objectives will guide all subsequent decisions in your wealth-building journey.
2. Diversify Your Investments
Diversification spreads exposure across asset classes and sectors to help manage risks. A well-rounded wealth management strategy, as outlined in our Comprehensive Guide to Private Wealth Management, can help keep a portfolio balanced through different market environments.
Moran Wealth Management acts as an Active Portfolio Manager, proactively monitoring global and domestic markets to optimize each portfolio strategy. They create personalized investment solutions that reflect your individual financial goals, risk profile, and timeline.
For HNWIs, diversification often goes beyond traditional stocks and bonds to include:
- Public equities: Stocks offer growth potential but come with inherent market risks. Maintaining a balance across sectors and geographies can help mitigate risk.
- Fixed income: Bonds and other debt instruments provide steady income streams and can offer stability to your portfolio during market volatility.
- Real estate: Whether through direct property ownership or Real Estate Investment Trusts (REITs), real estate offers both income and capital appreciation.
- Alternative investments: These include hedge funds, private equity, commodities, and more, providing options less correlated with public markets.
A diversified portfolio can reduce the risk that wealth is overly exposed to any single market or asset class. For transparency, MWM utilizes Separately Managed Accounts (SMAs), providing clients with unparalleled insights into their individual holdings, transactions, and performance metrics.
3. Set Portfolio Guidelines and Guardrails
Document an investment policy that reflects your situation and preferences. Consider:
- Risk and allocation ranges: Target mixes and rebalancing bands.
- Liquidity needs: Near-term cash flow and emergency reserves.
- Constraints: Position size limits, concentration thresholds, and any industry or exposure restrictions you prefer to avoid.
- Time horizon and tax considerations: How account types and holding periods affect after-tax outcomes.
Clear guidelines help keep decisions consistent over time.
4. Explore Alternative Investments
As a high-net-worth individual, traditional investment strategies may not provide the diversification or risk mitigation you need. This is where alternative investments come in. Moran Wealth Management’s investment process specifically includes a focus on alternative investments to a comprehensive solution.
These investment options can include:
- Private equity: Investing in private companies offers higher returns but comes with more risk and less liquidity than public markets.
- Venture capital: Funding early-stage startups can provide substantial returns if the company grows, though it carries significant risk.
- Hedge funds: These funds use a variety of strategies to produce returns, often unrelated to stock market performance, providing a hedge against market volatility.
- Real estate: Real assets like property offer a hedge against inflation and diversify your portfolio beyond stocks and bonds.
Alternative investments allow you to capture growth in areas beyond traditional markets, providing a unique layer of diversification and protection for your wealth.
5. Consider Tax Optimization Strategies
One of the most effective ways to build and preserve wealth is through tax-efficient strategies. HNWIs often face higher tax burdens, so optimizing your tax situation can make a significant impact on your wealth accumulation. Moran Wealth Management integrates proactive tax strategies into your overall financial picture.
Consider these strategies:
- Tax-deferred growth: Contribute to retirement accounts like IRAs or 401(k)s to allow your investments to grow without being taxed until withdrawal.
- Tax-loss harvesting: MWM actively manages client tax situations through tax loss harvesting and other strategies designed for efficient wealth preservation and growth.
- Charitable contributions: Donate to qualified charities to reduce your taxable estate while supporting causes you care about.
Thoughtful tax planning can help keep more of your returns working toward your objectives.
6. Risk Management and Estate Planning
Protecting your wealth from risks such as market downturns, lawsuits, or family disputes is crucial for long-term financial security. Moran Wealth Management provides comprehensive guidance across investment management, estate planning, and asset protection strategies.
Effective risk management strategies include:
- Insurance: Life, umbrella, and long-term care insurance can protect your wealth from unforeseen events.
- Estate planning: Wills, trusts, and family offices help carry out your wishes and may reduce taxes and probate complexity.
- Asset protection: MWM addresses potential legal and insurance-based risks with customized asset protection solutions, helping to manage assets for business owners and retirees.
Integrating these elements can align wealth with family objectives across generations.
7. Regularly Review and Adjust Your Plan
A long term wealth plan benefits from periodic reviews. Life events, market conditions, or tax law changes may prompt updates to allocation, savings rates, distribution plans, and estate documents.
Moran Wealth Management conducts ongoing investment portfolio assessments and rigorous performance tracking to maintain alignment with financial objectives and market conditions. An annual review with an advisor (backed by a team that includes CFPs®, CFAs®, and MBAs) can help you make necessary adjustments to your asset allocation, tax strategies, and estate plan, ensuring that your wealth-building strategy remains aligned with your goals.
Frequently Asked Questions (FAQs)
How should I think about asset allocation?
Start with goals, time horizon, and risk tolerance. Many investors use ranges for equities, fixed income, and diversifiers, then rebalance as needed.
What are the 7 pillars of wealth?
The 7 pillars of wealth include income, savings, investing, tax planning, debt management, estate planning, and protection. These elements form the foundation for a well-rounded wealth management strategy.
What is the 7% rule in finance?
The 7% rule suggests that a well-diversified portfolio can potentially generate an average annual return of 7%, factoring in inflation. This rule provides a long-term benchmark for wealth growth.
How often should I review my plan?
At least annually, or after major life events such as liquidity events, retirement, relocation, or family changes.
Why Choose Moran Wealth Management
Building a long-term wealth plan can support your financial future and personal goals. By focusing on clear objectives, diversification, tax optimization, and appropriate risk management, you can develop a strategy designed to balance growth and preservation across market cycles. If you are considering specialized or alternative strategies, we can help evaluate eligibility, risks, costs, and fit with your objectives.
Ready to start building your wealth plan? Schedule a consultation with Moran Wealth Management to begin crafting a strategy tailored to your unique goals. You can reach the advisory team by phone at 239-920-4440 or via email.