Financial Planning

Wealth Management: Building and Preserving Your Wealth

Wealth Management: Building and Preserving Your Wealth

Wealth Management: Building and Preserving Your Wealth

While investment and wealth management are often spoken about in the same terms, some subtle differences exist. In effect, investment management is part of your overall wealth management, which is as much about preserving your wealth as building it. This becomes especially important in retirement when you will likely see a significant fall in your regular income.


Preserving your capital

Retirement planning is a perfect example where the need to protect your capital becomes more acute as you move towards retirement. In the early days of your working life, there may be the opportunity to focus more on capital appreciation with a long-term investment horizon. However, as we age, there tends to be a greater need for stability, as investment horizons shorten, and a necessity to plan for future income requirements.


There are many issues to take into consideration, which include:



If your funds/wealth is not appreciating at least in line with inflation, you are becoming poorer in relative terms. This issue has become more evident during the pandemic with minuscule savings rates and double-digit inflation. In reality, there will be spikes in inflation which can be challenging, but the long-term result is more important.



Over time, taxation of your investment funds and income can significantly impact your relative wealth. This is where tax-efficient investment vehicles such as pensions and ISAs come into play, shielding funds and investments from income and capital gains tax. The recent abolishment of the pension fund lifetime allowance has removed an additional layer of potential tax in this area, but taxation is a constantly moving animal. Remain vigilant!


Income and capital

When it comes to income and capital, in a perfect world, you will look to retain your capital and use the income to fund your financial needs. In reality, it is a mix of capital appreciation and income which will likely support your cash flow going forwards. If your income requirements exceed the combination of long-term capital appreciation/investment income, you may be fighting a losing battle to preserve your relative long-term wealth. You could run out of money!


Protecting your income

We live in a world where we are conditioned to insure our homes, cars and other relatively expensive items. Once we move beyond traditional insurance products, the level of take-up starts to fall. However, there are numerous ways in which you can protect your income (and assets) using insurance policies such as:-


Critical illness cover

While not an issue easily discussed over the breakfast table, critical illness cover will provide financial assistance when you cannot work due to a critical illness. Terms and conditions will vary, although policies can offer either a lump sum payment or regular income. They usually last until you return to work or retire.


Life insurance

Life insurance is a critical element of wealth management, generally structured in such a way as to leave your loved ones financially secure. For example, lump-sum payments could be used to repay mortgages, loans and other debts, leaving surplus funds for your family. Flexible and available in various formats, life insurance is one of the more popular protections.


Income protection

Direct protection of regular income is now possible with income protection insurance, which can be structured to cover several scenarios, such as illness, injury or even redundancy. Typically structured in a manner which would cover 60% of your regular gross income, usually sufficient to cover living expenses, it can be the difference between survival and a financial crisis.



Wealth management takes in various activities centred around wealth preservation and appreciation. As a result, you may encounter a few surprises when looking at the short, medium and long-term challenges as part of planning for later life. Finding the balance between preservation and appreciation is critical, and maintaining real-time spending power is crucial to achieving that target lifestyle in retirement.


Get in touch

For more information on building and preserving your wealth, get in touch to discuss your situation and options with one of our wealth management experts, or email us at