Financial planning and Wealth Management

Financial planning is a comprehensive assessment of your financial situation and your future goals. It involves creating a financial plan to help you answer important questions such as:

• How much do I need to save for retirement?
• How much do I need to save for my children education?
• How much do I need for a home?
• How much do I save for children marriage?

In other words, financial planning is the establishment of a process for attaining your financial goals by a thorough evaluation of your current financial status and exploring opportunities to improve it. On the other hand, financial planning is goal- oriented personal finance management. It mainly deals with building/creating the strategies to create wealth and meet financial goals either short-term or long-term.

Financial Planning is for every individual who are yet to meet their financial goals It is for anyone who wants to make the best out of the money they have, through personal finance, to meet their financial goals; be it short-term or long-term. Financial planning does it by taking your income, expense and savings into account and balancing them.

Financial planning is the practice of putting together a plan for your future, specifically around how you will manage your finances and prepare for all of the potential costs and issues that may arise. The process involves evaluating your current financial situation, identifying your goals and then developing and implementing relevant recommendations.

Financial planning is holistic and broad, and it can encompass a variety of services, which we detail below. Rather than focusing on a single aspect of your finances, it views clients as real people with a variety of goals and responsibilities. It then addresses a number of financial realities to figure out how to best enable people to make the most of their lives.

Financial planning is about looking at all elements of a person's financial life and coming up with a plan to help you as an individual meet your responsibilities and achieve your goals. It can include a number of services such as tax planning, estate planning, philanthropic planning and college funding planning.

Wealth is an accumulated resource or the value of existing assets a person own. Generally, net worth is a measure of wealth of an individual. Wealth management is all about managing one's wealth/ Net worth. As part of wealth management, investors often actively try to identify and take advantage of profit-making opportunities. Wealth managers generally aim their services at the highly affluent and may have expertise in the types of financial questions that affect the ultrawealthy, such as how to manage the tax and investments. They often coordinate services among different experts, such as working with a lawyer or an accountant on your behalf. Rather than seek out multiple professionals, you can work with a wealth manager who might coordinate with other experts on your behalf.

Wealth management is an Opportunity-oriented personal finance management. It predominantly deals with preservation, growth and further accumulation of the existing wealth. Wealth management is basically meant for the high-net-worth individuals. Thus, wealth management is undertaken by wealthy people who have already achieved or fulfilled their basic financial goals.

• Wealth assessment
• Risk Tolerance Assessments
• Asset Allocation
• Wealth Preservation Strategy
• Wealth Growth Strategy

Wealth Management is an active wealth management process. Here, a wealth manager will make decisions based on your portfolio, your risk tolerance and your preference for wealth preservation or wealth growth. The wealth manager will execute the asset allocation by investing in various asset classes based on your risk profile. In case of wealth management, wealth manager takes financial decisions by considering only your investment portfolio. Alternative assets such as private equity, real estate might also be considered.

Wealth management is the highest level of financial planning services. It generally includes comprehensive investment management alongside financial advice, tax guidance, estate planning and even legal assistance. In fact, they will coordinate with other financial experts — such as accountants or estate planning specialists — on behalf of clients to offer comprehensive financial advice.

A holistic plan will help you identify your risks, fix your income leakages, set measurable goals, and create wealth in the process. Financial planning does not require you to have sufficient wealth. As you execute the plan, you will be able to create an investible surplus, cover your risks through insurance and make investments suiting your risk profile.

On the other hand, wealth management comes into picture when you have created wealth and need professional help to grow, preserve and enjoy your wealth. It requires the active monitoring of the wealth manager to identify the right mix of investments for you. Having a financial plan in place is the first step to create wealth.