What is financial planning and wealth management?

With the ever-changing landscape of the financial world and an increase in global volatility, it is becoming essential for all individuals to be able to manage their finances prudently. While often associated with complex investments or business ventures, financial planning encompasses a wide range of approaches to help you make intelligent decisions about your future.

The following guide will help you understand what financial planning and wealth management is, how they can benefit you, and some of the different options available.

Before we get immersed in financial planning, it is essential to understand that financial planning is not a one size fits all approach. Personal circumstances, financial goals, and even individual personality are all factors that need to be considered when planning. Therefore, it is crucial to seek help from a professional who will understand your unique needs.

What is financial planning and wealth management?

Financial planning and wealth management is the super-specialized field dedicated to assisting individuals with their finances. Financial planners work with people from all walks of life and focus on helping them build a financial plan based on their life goals. They can help anyone from young professionals to retirees, no matter their current income level or how much money is already in their bank account.

However, one mistake many individuals make is believing that financial planning is only practical when entering a new phase in their lives, such as starting a family. In reality, financial planning should be considered at any point in one’s life, as it can provide an excellent opportunity to plan for the future and help achieve one’s financial goals.

Types of financial planning services

  1. Review and analysis

When you have hired a financial planning professional, they will review your current savings, investments, and insurance policies, as well as make recommendations concerning how you can improve your outcome. In this process, you can ask the planner any questions that you may have about their service or the advice they give.

  1. Advice on investment products

Although most financial planners will work with clients to achieve their financial goals, it is not uncommon for them to offer investment advice. As the name suggests, financial planning is not solely concerned with investments. However, just as they will assist you with the investment decisions themselves, they will also give extensive advice on choosing the best products and making sure they are suitable for your needs.

  1. Tax planning

By engaging a financial planner, you can make use of their expertise when it comes to tax planning. For example, they will advise which investments are most beneficial in terms of tax efficiency and how this can be optimized best for your situation.

  1. Estate planning

Alongside tax planning is estate planning, a great way to ensure you can pass your assets on to the people you love in the most efficient manner possible. Estate planners will provide you with the transfer of your purchases when it is most advantageous so that taxes are minimized as much as possible. They can also advise you on making gift-giving more tax-effective, which can be especially beneficial for those who enjoy giving their friends and family presents now and again.

  1. Planning for retirement

Retirement is a significant part of life. For many, it allows you to relax and do what you enjoy, which can be difficult after years of hard work. However, when you retire, it is also essential to start thinking about how you can support yourself financially. To do this, financial planners will advise how and when you may want to access raising funds, such as a pension or individual retirement account (IRA).