At Julius Baer, our wealth planning specialists believe smart financial decisions begin with a clear understanding of your goals and language that shape them. Drawing on their insights, we’ve decoded the vocabulary of wealth in a way that we hope is approachable and insightful. These definitions are designed to give you a solid foundation – and maybe even a few “a-ha” moments.
Financial planning vs. wealth planning
Before diving into the language of wealth, let’s clear up a frequently asked question: what’s the difference between financial planning and wealth planning?
Think of financial planning as your personal financial GPS – it helps anyone, at any income level, navigate budgeting, saving, and retirement. Wealth planning, however, shifts into higher gear. It’s tailored for high-net-worth individuals (see definition below) and families, focusing on preserving, growing, and eventually transferring significant wealth.
In short, financial planning lays the groundwork; wealth planning builds the legacy. Both are vital, but if your assets are substantial, it’s time to go beyond the basics. That’s where this glossary of wealth management terms comes in – to make the language of wealth work for you.
Asset allocation
The mix of asset classes – such as equities, bonds, and alternatives – tailored to your goals, investment horizon, and risk appetite. Asset allocation is the bedrock of any portfolio, balancing growth with protection.
Asset class
Asset classes are broad categories of investments that share similar characteristics, risks, and returns. Each asset class behaves differently: equities offer potential for long-term growth and income; while bonds usually provide regular income and relatively lower risk; real estate generally adds income and serves as an inflation hedge. Commodities, such as gold, and currencies, on the other hand, can be more volatile and are often used for hedging or speculative purposes, with commodities providing a hedge against inflation and currencies being influenced by global economic trends.
Balanced portfolio
A diversified portfolio blending growth and income-generating assets. To balance risk and return, often combining stocks, bonds, and alternatives in harmony.
Compounding
The secret weapon of long-term wealth – returns generate their own returns over time. Compounding can turn smart investing and reinvestment into exponential growth. Start early, stay consistent, and watch your money work for you.
Diversification
Don’t put all your eggs in one basket. Diversification spreads risk across asset classes, sectors, and geographies to smooth returns and reduce volatility. It’s a cornerstone of smart, resilient portfolio construction.
ESG investing (environmental, social, and governance)
Invest with impact. ESG strategies allow you to align your portfolio with values – such as sustainability, ethics, and good governance. It’s investing for returns and a better world.
Estate planning
Plan today to protect tomorrow. Estate planning ensures your wealth is distributed according to your wishes, with maximum efficiency. It’s about legacy, family harmony, and control.
Family office
A family office provides bespoke services – from investment management to lifestyle planning – under one roof. It’s the ultimate in personalised wealth support, designed to grow, protect, and transition generational wealth seamlessly.
Generational wealth transfer
It’s not just about passing money down – it’s about passing values, vision, and stability. Generational wealth transfer strategies help avoid conflict, and ensure your wealth benefits the right people at the right time.
High net worth individual (HNWI)
HNWI typically hold investable assets of at least USD 1 million, while ultra-high-net-worth individuals (UHNWIs) are generally defined as those with assets under management (AuM) of USD 50 million or more. These categories unlock access to exclusive investment opportunities, private banking, and white-glove advisory services tailored to complex financial lives.
Inheritance
Receiving an inheritance means taking ownership of a deceased person’s assets, rights, and obligations — whether as a legal heir or a named beneficiary. It can include anything from property and investments to personal items and business interests.
Intergenerational planning
It’s not just about your children – it’s about your grandchildren too. Intergenerational planning ensures your values and wealth endure across generations, using tools like trusts, family governance, and structured communication.
Intra-generational wealth planning
The horizontal transfer of assets among individuals within the same generation—such as spouses, siblings, or close friends—enables affluent individuals to personalise their legacy, optimise estate planning, and reflect evolving family structures and values.
Knowledge transfer
In wealth planning, knowledge transfer means more than passing on assets – it’s about sharing financial wisdom. Teaching the next generation about investing, stewardship, and wealth management helps preserve family values and empowers heirs to sustain and grow their inheritance.
Legacy planning
What will your wealth say about you? Legacy planning integrates financial and philanthropic goals to create meaningful, lasting impact – be it through education, charitable giving, or preserving family heritage.
Lifestyle planning
Design a life you love – and fund it confidently. Lifestyle planning aligns your wealth with the way you want to live, whether that means global travel, art collecting, or early retirement.
Liquidity planning
Even the wealthiest need access to cash. Liquidity planning, including insurance solutions, ensures you can meet short-term needs, seize opportunities, or navigate market dips – without having to sell long-term investments at the wrong time.
Pension planning
Even if retirement is a luxury, not a necessity, pension planning helps you structure income streams efficiently. It includes reviewing employer pensions, and private plans.
Philanthropy
Giving back can be just as fulfilling as growing wealth. Strategic philanthropy – via donor-advised funds, foundations, or charitable trusts – lets you support causes you care about, while estate planning efficiently.
Portfolio management
Portfolio management involves overseeing your investments to align with your goals. In advisory management, you make the final call with expert input; in discretionary management, professionals handle decisions on your behalf—offering efficiency, expertise, and peace of mind.
Retirement planning
Whether you plan to retire early, never, or somewhere in between, retirement planning creates a roadmap for income, healthcare, and lifestyle in your next chapter – with flexibility built in.
Risk tolerance
Are you a thrill-seeker or safety-first? Understanding your risk tolerance helps shape your investment strategy, ensuring you stay comfortable and committed – especially when markets wobble.
Succession planning
Essential for entrepreneurs, family business owners, and individuals with complex wealth, succession planning ensures a smooth transfer of leadership, responsibilities, and assets to the next generation. It helps minimise disruptions, avoid legal complications, and preserve both personal and business legacies.
Trusts and estates
Trusts are versatile tools to control, protect, and transfer wealth, while minimising legal battles. They’re central to any estate plan, offering structure and peace of mind for heirs.
Wealth preservation
The art of safeguarding what you’ve earned. Wealth preservation is the practice of managing assets to maintain their value and purchasing power across generations. It focuses on minimising risks such as market volatility, inflation, taxation, and legal exposure — helping ensure your wealth endures over time.
Wealth structuring
Leverage structures, timing and jurisdiction to ensure your wealth is managed as effectively as possible, minimising your exposure while maximising your returns. Wealth structuring is a key driver of long-term wealth growth.
Will and testament
A will ensures your assets go where you want them to – whether you have legal heirs or not. It’s a legal must-have, backed by other tools like trusts, to simplify the transfer of wealth and avoid conflict.
Women and wealth
Women are increasingly leading financial decisions. Wealth planning for women considers unique factors like longevity, career breaks, and entrepreneurial growth – empowering financial independence and legacy building.
Understanding the language of wealth is the first step to mastering it. With the right knowledge, you can shape a legacy that reflects who you are and what you stand for. Now that you know the terms, you hold the tools. Use this glossary as your starting point – and let your ambitions, legacy, and values lead the way.