The four stages of wealth management |

The four stages of wealth management

William Creekbaum
Special to the Nevada Appeal

In today’s fast-paced world, investors have more to think about than simply their stock portfolios. When creating wealth, they must also consider issues like tax planning, risk management, borrowing needs, estate planning and charitable giving.

Life is about stages. So is wealth management. As investors move through stages of life, they face a succession of financial challenges. Some begin early and never go away. Others, like estate planning, come later in life.

We believe wealth management can be viewed as a cycle with four main stages:

Wealth accumulation: During this phase, individuals are primarily focused on acquiring the assets they will need to meet their long-term financial goals.

Wealth preservation: As investors move into their peak earnings years, their financial focus may gradually shift from asset growth to risk management – protecting their portfolios from unexpected adversity to market volatility.

Wealth utilization: At some point, most individuals will need to draw upon their accumulated resources to fund specific needs, such as college tuition costs or retirement expenses.

Wealth transfer: Many affluent individuals hope to leave a sizable legacy behind for their children, grandchildren or their community.

Keep in mind, wealth management stages often overlap, and the transition between stages can be gradual. Therefore, individuals and their financial advisors must address a continuing change in new and old financial challenges. For example, increased life expectancies, soaring medical costs and rising expectations for higher living standards translate into retired investors having to balance both current income and capital growth.

Finding strategies to address these problems may require difficult tradeoffs. Investors should weigh their risk tolerance against their investment return objectives. They may also have to decide between generating a high level of current income or a rate of capital growth sufficient to support a somewhat lower standard of living later in life.

These decisions are difficult and should be made within the context of a comprehensive wealth management strategy.

Working directly with a financial advisor could be a good strategy for reaching long-term investment goals. Together, you can review the appropriate investment options available and formulate a personalized investment plan and other practical strategies for managing your finances now and throughout retirement.

For information about wealth management, call me at 689-8704 or e-mail me at:

Smith Barney does not provide tax and or legal advice. Please consult your tax and or legal advisors for such advice.

• William Creekbaum, MBA, CFP, a Washoe Valley resident, is senior investment management consultant of Smith Barney, a financial services firm serving Northern Nevada.