ELLEVEST INSIGHTS

Tariffs, elevated interest rates and inflation, a government shutdown, a cooling labor market, and heaps of policy uncertainty could not keep the markets from finishing strong as the S&P 500 soared to new record highs during the final weeks of 2025. 

The S&P 500 gained 16% for the year, the DJIA 13%, and the NASDAQ, 20%. Despite the gloomy recessionary scenarios predicted at the beginning of the year, the economy grew at a faster clip than many economists expected. 

US equity markets have posted well-above-average returns now for the last three consecutive years. That’s not only a win for clients, but a testament to the resilience of the economy and the power of staying invested. By any objective measure, the industry has succeeded in its primary goal: growing wealth for clients.  

It’s more than the numbers. 

Our industry's “more is always better” convention has traditionally been the measure of success. Thousands upon thousands of hours of research and analysis are spent seeking out-sized returns for clients. However, this single-minded focus on generating returns may in fact be failing these same clients. 

In the wealth management world, we are trained to optimize. We choose investment strategies to optimize risk-adjusted returns; we optimize losses to minimize tax drag; we seek to generate optimal portfolios for a given level of risk. From asset allocation and asset location to tax-loss harvesting and tax-efficiency gifting, we are in the business of optimizing our clients’ wealth. These are important techniques and they are a core part of what we do at Ellevest. But if this is all that wealth management has to offer, we are totally missing the point. 

So my outlook for 2026 isn't about market predictions. It's about a fundamental shift that’s needed in our industry, an augmentation of traditional wealth management to focus on what really matters. A movement from wealth management to wealthcare. 

What is Wealthcare?

Wealthcare is wealth management reimagined with a new focus: helping maximize not just returns but quality of life by aligning finances with what truly matters. It goes beyond optimizing returns to optimize well-being. It's the recognition that financial returns shouldn't be the primary measure of success — and that how wealth adds meaning, value, and happiness to people's lives is far more significant.

This isn't just holistic financial planning with a new name. It goes farther to help clients identify and discover ways they can use their wealth to maximize their sense of well-being, from health to community to personal fulfillment and happiness.

Optimizing wealth doesn’t automatically lead to an optimized life. We need to challenge the old assumptions that more is always better, that wealthier clients are happier clients, that if we generate the returns, clients will figure out on their own how to use their wealth to live their best lives. 

While having more money often leads to more choices, more flexibility, and greater independence, the outcome of a better life is not a given, unless you uncover for yourself the elements, the values, the essence of what a better life truly means for you. And what we’ve seen at Ellevest is that sometimes the decisions that come with achieving an optimized life run counter to optimizing returns. 

Wealthcare in Practice

A few years ago, a retiring client sold an investment property and was considering using the proceeds to pay off her home mortgage. A cost-benefit financial analysis showed that holding on to her low-rate mortgage and rolling over the proceeds in a tax-efficient fund that would allow her to defer paying capital gains tax would result in a higher overall expected return (aka more money!). That was the correct financial answer, the return maximizing solution — the one that would allow her to spend more in retirement. But we observed that carrying the debt, even though it was not a large amount, caused her unease and anxiety. While the optimal financial solution would have been better for her wealth, it wasn’t the solution that would provide her with the peace of mind and happiness of being debt free. So we helped figure out the appropriate trade-offs that would allow her to pay off her home mortgage; doing so gave her the sense of freedom and confidence that enhanced her life.

Another client had focused for years on minimizing taxes. She lived in a state with no income taxes but whose political leanings ran increasingly counter to her values and beliefs. Moving to another state that she loved, but with higher income taxes, higher property taxes, and higher living expenses wasn’t a wealth maximizing strategy. Over time, we helped her to realize that she was prioritizing a lower tax bill over her well-being and that her wealth wasn’t being optimized for her happiness. She’s since moved to the new state, her proclaimed “happy place”, where she has the mental freedom and emotional space to live her life to the fullest.

The Functional Approach to Money

Recently, I had routine bloodwork done and one result unexpectedly shot up. My doctor messaged the standard recommendation: exercise more, eat healthier, start taking medication. She never asked how much I already exercise, about my diet, or what recent stressors might have contributed to the result. She based her diagnosis on one metric without considering the whole picture or discussing my actual health goals.

That got me thinking: numerical lab results aren't the whole picture, just like investment success isn't only about portfolio returns. You can have perfect labs but not be physically fit enough to engage in the activities you want. For me, optimizing health means being able to ride 50 miles on a weekend, easily lifting my suitcase into the overhead compartment, exploring a new city on foot for hours. Great lab results without that functional capacity isn’t my definition of success.

Wealthcare applies this same functional approach to money. Instead of focusing on beating benchmarks, we focus on how our clients’ wealth can meaningfully enhance their lives and reduce pain points and stress. Instead of return on investment, we seek to maximize our clients’ return on life. 

Navigating the Tension

There's a legitimate question here: How do you balance wealthcare with fiduciary duty? As fiduciaries, we must act in the client's best interest. When a client makes an informed choice to prioritize well-being over wealth accumulation, supporting that decision is exactly what fiduciary duty requires. Our role is to help clients understand the financial trade-offs and ensure they are well-informed to make intentional choices that align with their values.

The Great Wealth Transfer and Beyond

With the Great Wealth Transfer underway, we see an even greater need for wealthcare among women who are the first beneficiaries of this transfer. So many women have spent decades as the Chief Care Officers for their families and communities and are now, perhaps for the first time, in a position to focus only on themselves. Often these women aren’t accustomed to prioritizing themselves and struggle to identify what they want. Wealthcare is designed to bridge that gap and help them move from wealth paralysis to feeling confident.  

My Outlook for 2026

This year, we are making a fundamental shift in how we think about wealth management. Wealthcare is a meaningful approach that helps people create fuller, happier lives by connecting personal values with financial priorities. It is a continuous journey that brings outside experts into the conversation — health specialists, wellness leaders, technologists, service providers, community builders — to help investors expand their thinking on what's possible. The focus will shift from minimizing just risk and taxes to minimizing pain points and stressors so life can be lived more meaningfully. And it will lead to deeper conversations on whether more is really always better.

We can't control the markets, but we can plan for a life that feels as good as the numbers look. After all, if your wealth isn't optimizing your life, then what's the point of having more of it?

Cheers to a new year and a new perspective on optimizing your best life.