Blog Did You Know…?June 01, 2023
Often, we find clients don’t appreciate the difference between Investment Management and Financial Planning, thinking that they are the same. However, they are different.
Investment Management typically consists of portfolio construction, asset allocation, understanding risk tolerance, and time horizons all to achieve an expected return over a market cycle. The Investment Manager will look for opportunities to grow the investments, reduce risk, take advantage of tax loss selling, and update their clients on market conditions to reduce anxiety in volatile times.
Financial Planning is about helping clients define their goals, dreams, desires, and fears. It’s about understanding their current financial position, and existing strategies, and having an in-depth understanding of their family dynamics. These elements lay the foundation for a comprehensive financial plan, which identifies ways to reduce tax, pay down debt, mitigate risk, increase savings, and determine the amount needed to retire on their terms.
Investment Management is focused on growing the client’s market-based investments. Financial planning is focused on maximizing the client’s life’s work. Both are integral to the client’s long-term success.