8 Wealth Preservation Strategies for High-Net-Worth Investors

Market volatility is inevitable. But for high-net-worth investors, the challenge isn’t just weathering short-term turbulence—it’s preparing for it with the kind of foresight that preserves wealth across generations. The goal is to protect your assets without retreating from long-term growth.

Successful wealth preservation is part science, part discipline. It involves managing risk, optimizing for taxes, diversifying wisely, and building in flexibility. Below are eight strategies that, when used strategically, can help safeguard your portfolio through volatile times while keeping your broader financial plan on course.

1. Use Options Collars to Hedge Concentrated Equity Positions

If you hold a large, low-cost-basis position in a single stock—whether from founding a business, inheriting shares, or simply staying invested in a long-term winner—selling might not be ideal due to taxes or emotional attachment. That’s where an ‘options collar’ can provide some breathing room.

A collar uses a protective put (to cap your downside) and a covered call (to generate income and help fund the protection). This combination can help shield you from steep losses while still allowing you to hold the position. Yes, your upside may be limited—but for many investors, a good night’s sleep is worth the tradeoff.

This strategy is particularly useful if you're waiting for a better exit opportunity, a liquidity event, or simply want to hold on to shares without taking on unnecessary risk.

2. Incorporate Bonds for Income and Capital Stability

Bonds might not be flashy, but in volatile markets, they can play a vital role in calming your portfolio. Even when things shake up the fixed income space, the right bond allocation can still provide predictable income and help buffer equity drawdowns.

What are your options? Government bonds offer lower risk and high liquidity. Municipal bonds can deliver attractive, tax-exempt income (especially valuable in high-tax states). Investment-grade corporate bonds strike a balance between yield and stability.

One strategy that works particularly well in volatile or uncertain rate environments is ‘bond laddering.’ In this case, you spread maturities across different time frames to manage risk and keep cash flowing. This can help smooth cash flows, reduce interest rate sensitivity, and help ensure capital is available as needed.

3. Diversify with Alternative Investments

True diversification goes beyond the 60/40 portfolio. For high-net-worth investors, alternative investments can introduce a new layer of resilience by offering returns that aren’t tied to the ups and downs of public markets. These may include private equity, hedge funds, real estate, infrastructure, or commodities.

For example, real estate may generate rental income and act as an inflation hedge. Hedge funds may employ strategies designed to preserve capital or exploit market dislocations.

Because alternatives often have limited liquidity and complex fee structures, they are typically best used as part of a broader, advisor-led strategy. Proper allocation and due diligence are essential to ensure alignment with your objectives and risk tolerance.

4. Consider Structured Notes for Customized Market Exposure

Structured notes offer tailored market exposure with built-in protection features. Think of them as customizable investments designed to balance risk and reward.

A common example: a note that offers 10% downside protection and caps upside at 12%. You get partial insulation from market losses and a defined return range—ideal for investors who want to stay invested without fully riding the market rollercoaster.

However, these are sophisticated tools and should be used with care. Credit risk, liquidity constraints, and complexity make it crucial to work with an advisor who can evaluate whether a specific note fits your broader plan. But when used correctly, structured notes can be a valuable part of your risk management toolkit.

5. Employ Tax-Efficient Investment Strategies

It’s not just what you earn—it’s what you keep. Tax-efficient investing can make a significant difference over time, especially for high-net-worth investors.

Two strategies worth considering:

• Direct Indexing: This allows you to hold the individual stocks in an index rather than a single ETF or mutual fund, which creates opportunities to harvest losses and offset gains in a more precise, tax-efficient way.
• Roth Conversions: When markets dip, converting assets from a traditional IRA to a Roth IRA can reduce the upfront tax hit—and set the stage for tax-free growth and withdrawals later.

These strategies can meaningfully improve long-term after-tax returns, especially when coordinated with your CPA or financial advisor.

6. Give Strategically Through QCDs and DAFs 

Philanthropy and tax efficiency don’t have to be mutually exclusive. For charitably inclined high-net-worth investors, giving can be part of a broader wealth preservation strategy.

• Qualified Charitable Distributions (QCDs): If you’re 70½ or older, you can donate up to $108,000 directly from your IRA to a qualified charity in 2025. This can satisfy required minimum distributions (RMDs) without increasing your taxable income.
• Donor-Advised Funds (DAFs): These allow you to donate appreciated assets, receive an immediate deduction, and then distribute grants over time. It’s a powerful way to reduce capital gains exposure while supporting causes you care about.

When thoughtfully integrated into your estate and tax plan, strategic giving lets you amplify impact—both financially and philanthropically.

7. Rebalance Regularly to Control Portfolio Drift 

Sometimes, the smartest move is simply going back to basics. In this case, rebalancing.

Over time, portfolios drift. Equities may outperform fixed income, or a specific sector may become overweight. Without intervention, this “creep” can expose you to more risk than you intended.

Rebalancing brings your asset mix back in line with your target allocation. It also enforces the discipline of selling high and buying low—a powerful habit that helps protect your capital during periods of volatility.

For taxable accounts, rebalancing should be done with tax sensitivity in mind. This means harvesting losses when appropriate and deferring gains when possible.

8. Set Realistic Expectations to Stay Grounded 

Wealth preservation is also about mindset. In bull markets, it’s easy to become overconfident and take on unnecessary risk. During downturns, it’s easy to panic. But prudent investing means setting return expectations that reflect your long-term goals and actual risk tolerance, not just what the market is doing now.

When expectations are grounded, you’re more likely to stick with your plan during periods of volatility. That consistency is often the difference between success and costly detours.

Final Thoughts

Preserving wealth in volatile markets doesn’t mean retreating. It means being thoughtful, strategic, and disciplined. The right combination of investment tools, risk management, tax strategy, diversification, and clear-headed decision-making can help you not only weather the storm but come out ahead on the other side.

(Curious to learn more about wealth preservation tactics for high-net-worth investors? Watch this free on-demand webinar from our team of experts.)

And you don’t have to go it alone. If you're looking for an experienced partner who brings objectivity, discipline, and a sophisticated suite of investment strategies to the table, we’re here to help.

The information presented is for educational purposes only and is not intended to be a comprehensive analysis of the topics discussed. It should not be interpreted as personalized investment advice or relied upon as such.

Allworth Financial, LP (“Allworth”) makes no representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of the information presented. While efforts are made to ensure the information’s accuracy, it is subject to change without notice. Allworth conducts a reasonable inquiry to determine that information provided by third party sources is reasonable, but cannot guarantee its accuracy or completeness. Opinions expressed are also subject to change without notice and should not be construed as investment advice.

The information is not intended to convey any implicit or explicit guarantee or sense of assurance that, if followed, any investment strategies referenced will produce a positive or desired outcome. All investments involve risk, including the potential loss of principal. There can be no assurance that any investment strategy or decision will achieve its intended objectives or result in a positive return. It is important to carefully consider your investment goals, risk tolerance, and seek professional advice before making any investment decisions.