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HomeMoney Making7 Wealth-Building Moves Financial Advisors Swear By

7 Wealth-Building Moves Financial Advisors Swear By


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Households that work with financial advisors accumulate nearly four times more wealth over time than those who go it alone. With expert guidance, you can optimize your financial decisions, minimize tax burdens, and build a stronger retirement portfolio.

From investment strategies to risk management, financial advisors use powerful techniques to help clients maximize their nest egg. Keep reading to discover seven wealth-building moves that can help you retire 40% richer.

1. Financial Planning vs Portfolio Management – Or Both?

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Financial advisors excel in two crucial areas. Advisors who help with a combination of the two services give clients a stronger, more robust retirement strategy.

As planners, they analyze your complete financial picture and develop strategies for everything from tax efficiency to estate planning. They select and monitor investments in their portfolio management role, adjusting strategies based on market conditions and goals.

Pro Tip: If you’ve got at least $100,000 in investments, check out a free service called SmartAsset. You fill out a short questionnaire and instantly get matched with up to three vetted financial advisors in your area.

2. Strategic Asset Allocation Through Market Cycles

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Experienced advisors design portfolios that can weather different economic conditions. They know how to combine growth investments like stocks with defensive assets such as government bonds, gold, and consumer staples stocks.

This balanced and diversified approach helps protect wealth during market downturns, capture growth in strong markets, and capitalize on economic expansion periods for substantial market gains.

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3. Cash Flow Management and Emergency Planning

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Expert advisors help structure liquid assets to balance safety with growth potential. Rather than letting cash sit idle in traditional savings accounts earning minimal interest, they often create a tiered liquidity strategy.

For emergency funds, they might recommend high-yield money market accounts that offer better returns while maintaining instant access. The next tier could include short-term bond funds, laddered certificates of deposit (CDs), and ultrashort-term bond ETFs, which can offer better returns than savings accounts while keeping funds relatively accessible.

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4. Smart Diversification Beyond Basic Stock Mixing

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Top advisors create sophisticated diversification strategies that go beyond simple stock-and-bond combinations. They might include alternative investments, real estate investment trusts, or commodity-linked investments.

This broad diversification helps reduce portfolio volatility and can enhance long-term returns.

Pro Tip: One modern way to diversify is with real estate and venture capital. Companies like Fundrise, offer investments as small as $10.

5. Tax-Efficient Investment Placement

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Advisors take a tax-aware approach to help preserve more wealth for retirement. A tax-aware investment strategy can save tens or even hundreds of thousands of dollars over time.

They carefully consider the tax implications of every investment decision, often using a technique called “asset location” to minimize tax burdens. Beyond account placement, advisors also look for tax-loss harvesting opportunities—strategically selling investments at a loss to offset gains and reduce tax liability.

Minimizing unnecessary expenses is another way to keep more of your money working for you. Overpaying for essentials, like your cell phone bill, can drain your budget without you realizing it.

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6. Risk-Adjusted Portfolio Rebalancing

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Professional financial advisors don’t take a “one and done” approach to your investments. They regularly adjust portfolio allocations to maintain optimal risk levels and monitor market conditions to rebalance when investments drift from target allocations.

In the face of recession or economic instability, this expert approach helps protect retirement savings from unnecessary market volatility while keeping strategies aligned with your goals.

Cutting unnecessary expenses is another way to keep more money working for you. Reducing recurring costs—like overpriced cell phone bills—can free up funds to invest in your financial future.

7. Legacy Planning Integration

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Legacy planning is the advisement service that sets true financial advisors apart from other finance professionals. These top advisors structure investment strategies to align with estate planning goals, ensuring wealth transfers smoothly while minimizing tax burdens.

By integrating estate and investment planning, advisors help protect your financial legacy while maintaining security throughout retirement. Planning ensures your loved ones are cared for without financial or legal hurdles.

Pro Tip: Want to save time, money, and stress while protecting your family? Where there’s a will, there’s a way.

Building Lasting Wealth

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Working with a qualified financial advisor who combines planning expertise with investment management can significantly impact your retirement success. Their comprehensive approach helps protect and grow your assets while navigating complex financial decisions.

Consider interviewing several advisors to find one whose expertise matches your retirement goals.