For high-net-worth individuals, managing investments is essential for successful wealth transfer. As part of the estate planning process, a wealth manager can help a client protect their assets and minimize inheritance and transfer fees and taxes. This can ensure that the maximum amount of their clients’ wealth is distributed according to their wishes without imposing an undue burden on the recipients.

Asset allocation is the process of dividing your investment dollars among different asset categories such as stocks, bonds, cash, and cash equivalents. The goal of asset allocation is to minimize risk while maximizing your investment return. Since asset categories do not all respond to market changes in the same way or simultaneously, poorly performing asset categories and any corresponding losses may be offset by gains in other asset categories to minimize the overall effect on your portfolio. Selecting an asset allocation is one of the most important investment decisions you will make. Your financial advisor can help you determine how to allocate your investment dollars depending on your goals, investment timeline, risk tolerance, and portfolio size.

No matter what type of assets you invest in, there will be an element of risk as markets and interest rates rise and fall. Diversification is a strategy your financial advisor will use to spread your money across various asset categories and industries to help reduce volatility in your portfolio over time, thereby helping manage and balance risk and reward in your investment portfolio. The proverb “Don’t put all your eggs in one basket” best describes the goal of diversification and should be top of mind when constructing an investment portfolio.