Integrated wealth management and holistic wealth management: expanding to meet the needs of the next generation

Let’s say you’re a tech founder and you’ve just sold your company. Your expectation is that now, everything will get easier, and you’ll be able to live the life you imagined.

But the reality is, wealth comes with complexity. You suddenly have more pulls on your time, from being invited to sit on boards to renovating your new vacation home. You feel like a business owner in your own personal life, juggling too many projects without the support you’re used to having. You used to look at your future as an exciting blank slate, but now you wish you had a roadmap to living well.

You’re in the middle of the wealth spiral — and you need a place to turn.

But, where exactly do people go to navigate the challenges that come with wealth, financial and otherwise?

Wealth managers and family offices are well-suited to be that place to turn, but traditionally, they focused mainly on finances, not on the individual’s lifestyle, their overall wellbeing, and their holistic success.

And here, too, there’s a gap between expectations and reality.

Research from Spectrem Group shows a significant difference between the types of services individuals expect to receive from their investment advisors and wealth managers and the services they were actually provided. For example, 93% of people surveyed expected to receive estate planning advice, but only 22% received it. 87% expected to receive non-liquid asset management, and only 5% received it. 76% expected to receive real estate advice, and 3% received it.

Both wealth managers and family offices are exploring ways to expand their services. Below, we’ll explore integrated wealth management and holistic wealth management, and how these approaches are helping to meet the needs of today’s high net worth families.

What is integrated wealth management?

Integrated wealth management is a comprehensive approach to managing an individual’s or a family’s financial affairs. It goes beyond traditional investment management, with the goal of creating a cohesive strategy that addresses the full range of a client’s financial goals.

In a conversation on FOXCast, the podcast hosted by the Family Office Exchange, Founder & Principal of Personal Fiduciary Advisors, LLC and Founding Board Member of the UHNW Institute Wally Head compares an integrated wealth management advisor to a general contractor on a construction project — someone who understands the family’s needs and culture, who finds the right suppliers and advisors and integrates their activities. But, he says, this construction project never ends, and a “wealth management GC” stays on the job as the needs of the family change over time.

Integrated wealth management can include:

1. Holistic financial planning: This involves creating a detailed wealth planning strategy that takes into account the client’s current financial situation, goals, and risk tolerance. Looking at every aspect of the family’s financial life helps in setting realistic goals and creating a roadmap to achieve them.
2. Investment advice & investment management: Integrated wealth management involves creating an investment strategy across all types of assets under management (stocks, bonds, real estate, etc.) to achieve the client’s financial objectives while considering their risk tolerance and time horizon.
3. Tax planning: Efficiently managing taxes is an integral part of wealth management. Providing tax advisory services helps clients navigate tax regulations, minimize their tax liabilities and optimize their overall financial situation.
4. Estate planning: This includes strategies for passing on wealth to heirs, minimizing estate taxes, and ensuring that the client’s wishes are carried out after their passing. It may involve creating wills, trusts, and other legal arrangements.
5. Retirement planning: Integrated wealth management helps clients plan for a comfortable retirement by determining how much they need to save, where to invest, and how to structure their retirement income, so they can live the life they imagined as retirees.
6. Risk management: This involves identifying potential risks that could impact a client’s financial well-being, such as disability, long-term care needs, or sudden financial setbacks. Providing brokerage services or guiding families through the process of selecting life insurance, long-term care insurance, etc. helps the family reduce risk and rest easy.
7. Charitable giving: For clients interested in philanthropy, integrated wealth management can help create strategies for charitable giving that align with their financial goals and values.
8. Education planning: If clients have educational goals for themselves or their children, integrated wealth management can include saving for educational expenses.

Integrated wealth management often involves collaboration among different financial professionals, such as financial advisors, investment managers, tax professionals, estate planning attorneys, and insurance specialists — all working under a unified strategy.

What is holistic wealth management?

Holistic wealth management typically refers to a broader approach that encompasses not only financial aspects but also takes into consideration a person’s overall well-being and life goals.

It’s a hot topic for family offices who want to provide support beyond traditional financial services to include factors like health, well-being, personal values, and life aspirations.

In a recent whitepaper on the Family Focused Family Office for UBS Family Office Solutions and Family Advisory and Philanthropy Services, Mark Tepsich and Nicole Sebastian explain that a Family Focused Family Office is designed to help the family be more intentional about fostering the five forms of capital that comprise their true wealth: financial, human, intellectual, social and spiritual.  

Holistic wealth management recognizes that financial health is closely intertwined with physical, emotional, mental, and social wellbeing, and aims to create a more balanced and fulfilling life for the individual or family.

Holistic wealth management can include:

1. Financial success: While holistic wealth management extends beyond financial services, it still includes effective management of financial assets, investments, and financial planning.
2. Life goals and values: Holistic wealth management takes into account the individual’s personal values, aspirations, and life goals. It aims to align financial decisions with these broader life objectives.
3. Everyday wellbeing and work-life balance: Holistic wealth management might involve strategies to reduce stress, increase leisure time, or prioritize family and relationships. It also takes into account the management of the individual’s lifestyle, homes and most valuable assets, so they can spend their free time on whatever matters most to them.
4. Health and wellness: This approach recognizes the importance of physical and mental well-being in achieving overall life satisfaction. It may involve strategies to support health and wellness, such as setting aside funds for healthcare expenses or pursuing activities that promote well-being.
5. Personal development: This approach may involve investing in the personal growth and development of family members, such as education, skills training, and pursuing meaningful experiences.
6. Legacy and contribution: Holistic wealth management considers how an individual wants to leave a positive impact on their family, community, or society. This may include charitable giving, volunteering, or passing down values to future generations.
7. Emotional and psychological factors: Recognizing the emotional and psychological aspects of financial decision-making, holistic wealth management may involve addressing mindset, behavior, and emotional attitudes toward money.
8. Risk management: Just as in traditional financial planning, holistic wealth management considers risk management, but it may also encompass psychological risks and strategies to cope with unexpected life events.
9. Adaptability: The approach is adaptable and flexible, recognizing that life circumstances change over time. Plans are reviewed and adjusted as needed to accommodate evolving goals and situations.

Holistic wealth management recognizes that true wealth encompasses more than just financial assets — it includes a fulfilling and balanced life that aligns with an individual’s values and aspirations. This approach requires a comprehensive understanding of the individual’s unique circumstances, goals and challenges, and offers family offices an opportunity to provide deeper, more meaningful services to the families they support.

New strategies for a new generation

So, where to start? How can family offices and wealth advisors adopt a more holistic approach?

Watch our on-demand webinar, The Family Office Expansion: Modern Solutions for Meeting the Needs of a New Generation.

During this panel conversation, leaders from tech platforms designed to support HNW households and family offices share trends in the challenges families are trying to solve and how family offices are using technology partnerships to expand their services — without investing the time and resources that would historically have been required.