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Wealth management isn't just about picking the right stocks or investments. It's a holistic, long term approach to looking after and growing your money.

Article by Akwasi Duodu

A guide to wealth management

Welcome to our guide to wealth management. Tailored for individuals aiming to build wealth in a tax-efficient manner, this guide provides insights and real-life examples to help you grow your knowledge of this topic, and build a solid foundation for your long-term financial well-being.

Before we start, let’s be clear.

Wealth management isn’t just for the super-rich. It’s for anyone who is looking to secure a financially independent future.

That includes people at the start of their journey who want to develop a plan, or those who may already have accumulated a little wealth by way of property and investments.

Related reading: At what net worth do I need a wealth manager?

What is wealth management?

Wealth management isn’t just about picking the right stocks or investments. It’s a holistic, long term approach to looking after and growing your money.

Wealth management is about knowing where you stand financially, figuring out where you want to go, and laying out a clear path to get there. This journey involves a mix of financial planning, wise investment choices, and methods for reducing taxes, all tailored to your personal goals and situation.

The elements of effective wealth management

In the next section if this guide to wealth management, we focus on four key areas.

Wealth management is built on several pillars. By understanding them, you can ensure a more secure and prosperous financial future.

They are:

  • Financial planning
  • Investment management
  • Tax planning
  • Estate planning & inheritance tax

In the following sections of this guide to wealth management, we take a look at each area, and offer a real-life example to give context to the information on offer in this article.

Financial planning

The bedrock of building wealth is a solid financial plan – it’s like a map for your financial journey.

A financial plan should start by outlining your goals. Whether it’s saving for a home, planning for retirement, or setting up a university fund for your children, gaining clarity on your objectives is key.

From there, you should plan out detailed steps on how to achieve these goals. These steps are crucial because they guide all other aspects of wealth management, and form what is called the financial planning process.

Real-life example

Let’s consider Jamie, a 40-year-old IT consultant in Manchester, who aspires to retire at 60 with a comfortable lifestyle.

Jamie’s financial plan involves calculating the required pension pot to ensure a steady retirement income.

By saving regularly into a personal pension and leveraging employer contributions, Jamie is well on his way to meeting his retirement goals, illustrating the importance of thorough financial planning.

Savings & investment management

Investing is where your plan starts to take action.

The key here is diversification. By spreading your funds across different types of assets, you minimise the risk of losing your money and increase the chance of higher returns.

Think of your investment portfolio as a team, where each player has a unique role. Some investments might offer steady, reliable growth (like bonds), while others offer the potential for high returns (like stocks). The right mix depends on your personal goals and attitude to investment risk.

Real-life example

Chloe and Sam, a couple from Bristol, diversified their investments to include stocks, bonds, and property within their ISA (Individual Savings Account) and pension scheme.

Their balanced approach combines high-growth stocks and stable bonds within their ISA for medium-term gains, while their pension, primarily invested in a mix of funds, offers long-term growth potential with tax efficiency.

This strategy showcases the benefits of diversification and tax-efficient investing in the UK.

Tax planning

Taxes can take a big bite out of your wealth if not managed carefully. Effective wealth management includes strategies to minimise tax.

This might involve choosing tax-efficient investments, making charitable donations, or taking advantage of tax-deferred retirement accounts.

The goal is to keep more of your hard-earned money in your pocket and to work within the legal framework to reduce your tax burden.

Real-life example

Harriet, a freelance writer in London, maximises her potential retirement earnings by contributing to her pension, which offers tax relief at her highest rate of income tax.

She invests in her pension every month and the government makes further contributions. This not only boosts her retirement savings but also reduces her immediate income tax liability.

Harriet’s proactive approach to using pensions for tax-efficient investing underlines the value of long-term tax planning.

Estate planning & reducing inheritance tax

Finally, estate planning ensures that your wealth is passed on according to your wishes and that your loved ones are taken care of. This involves setting up wills, trusts, and lasting powers of attorney.

Estate planning is about peace of mind for you and security for those you care about.

It ensures that your assets are distributed smoothly and according to your wishes, without unnecessary taxes or legal complications.

Real-life example

After inheriting a family home, Raj and Simran, a couple in Edinburgh, sought inheritance tax advice to understand how to efficiently pass on their estate to their children.

They learned about the nil-rate band and the residence nil-rate band, which could significantly reduce the inheritance tax liability on their estate.

By making gifts and setting up trusts as part of their estate planning, they could ensure more of their wealth is passed on to their children, rather than paid in taxes.

This example highlights the importance of seeking professional inheritance tax advice.

Summary – our guide to wealth management

Understanding wealth management and the methods you can use to reach your financial goals is the first step toward securing your financial future.

It’s about more than just investments; it’s a comprehensive approach to managing your finances. By focusing on financial planning, investment management, tax and estate planning, you can build a solid foundation for your wealth.

Remember, the goal of wealth management is to make your money work for you, ensuring a secure and prosperous future. Start by assessing where you are now, consider where you want to be, and make a plan to get there. With the right approach, you can achieve your financial goals and build lasting wealth.


Here are a handful of questions you may have after reading this article.

Please note this doesn’t represent financial advice. The answers are designed to illustrate your options. Always seek professional advice before making any decisions.

What are the different tax-efficient investment options besides pensions and ISAs?

Beyond pensions and ISAs, UK investors can explore Venture Capital Trusts (VCTs), the Enterprise Investment Scheme (EIS), and the Seed Enterprise Investment Scheme (SEIS). These options offer various benefits, including income tax relief, capital gains tax exemption, and loss relief. Overall they are aimed at encouraging investments in small and high-risk companies.

How do you choose a wealth manager in the UK?

Selecting a wealth manager involves checking their qualifications understanding the services they offer, and their fee structure. Look for advisers registered with the Financial Conduct Authority (FCA) for credibility. Personal fit is also crucial; ensure they understand your financial goals and can communicate complex ideas clearly.

What are the different ways to avoid inheritance tax?

To minimise or avoid inheritance tax, consider gifting assets during your lifetime, investing in assets that qualify for Business Relief, setting up trusts, and making charitable donations. Each strategy has nuances and rules, such as the seven-year rule for gifts, so professional advice is essential to navigate these options effectively.

I have a small investment portfolio. How can I  grow my wealth?

Individuals with smaller portfolios can start by maximising their ISA and pension contributions, as they are very tax efficient. Consider low-cost index funds for diversification, and reinvesting dividends. It’s wise to focus on long-term growth and avoid high-risk investments without proper research. Regularly reviewing and adjusting your portfolio in line with your financial goals is key.

At what level of net worth do I need a wealth manager?

There’s no strict net worth threshold for needing a wealth manager. It’s a matter of personal choice. If you are looking to develop a plan, or have made some investments already and are seeking guidance, reach out to a wealth manager and see how they can help.

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