We feel it is important to first understand how Financial Planning and Wealth Management differ from each other, before explaining them in detail.
Financial Planning and Wealth Management have a ‘Cause and Effect’ relation to each other. Financial Planning is more to do with identifying what financial goals we wish to achieve and laying a road –map for the same.
Whereas, Wealth Management has more to do with an execution strategy that we adopt in achieving set-out goals. To put –up more simply, the difference between Financial Planning and Wealth Management is somewhat like the difference which exists between Marketing and Sales.
While dealing with crucial aspects of our life, we seek advice of our family members, close friends and colleagues. This certainly helps us to tide over the situation in hand with much ease. However, idea of seeking solutions on critical matters such as medical, legal, taxation from our near and dear ones, who may not be qualified enough to deal with such subjects, may not yield desired results. For such professional matters, we would need advice from experts like Doctor, Advocate or a Chartered Accountant. Similarly on personal financial matters we need to seek advice only from Financial Planners and Wealth Managers.
Now let us understand what constitutes Financial Planning and what entails Wealth Management?
Financial Review and Planning is a process to understand customer’s personal and family’s financial needs and goals.
Next step would be to carefully draft a plan in order to fulfill these needs and goals through proper management of financial resources, risks, and make whole plan work on a tax efficient basis. Goals can be such as children’s education, children’s marriage, re-structuring of loans, our retirement, estate planning, and tax optimization.
Most young professionals do not believe in financial planning, may be due to lack of awareness, time or will. However, it is advised that one should start financial planning early in career. This not only inculcates discipline of saving and investing, but also, gives advantage of compounding to grow money.
Financial planning has always been the smartest thing to do, because someone needs to assess and highlight the truth. Irrespective whether you are affluent, from middle class or somewhere in between; you may have lot of things going on in your life in terms of money matter and overall financial situation that need to be interpreted, coordinated and addressed.
First let’s understand that wealth management is not same as managing an asset portfolio- which is more towards managing assets like Equity, Debt, Real Estate, Commodity, Insurance and generating money out of these assets.
However, wealth management is more long term and meshed towards realizing broader financial objects and goal. Often wealth management is mistaken as accumulation of money! However, more money does not mean more wealth. It’s been said that, “Money shouts and Wealth whispers”. Money is constituent of wealth but, not wealth itself. Wealth would also entail contributing towards philanthropic causes and also bequeathing it in the hands of able next generation.
One of the biggest mistakes people make is in thinking that “I can manage my financial affairs, all by myself”. However, most people harboring such thought gradually realize that they cannot deal with complexities and high-involvement work of Financial Planning, day to day management of portfolio and wealth, by finding time from their busy professional schedules. Besides one would need acumen, expertise, information, technology to make right plan and take effective investment decision on an on-going basis.
Professional wealth management service providers go long way in understanding you, your family, your needs and lifestyle, before coming up with plans to enable you to make, grow and distribute your wealth.
Obviously as life goes on, objectives and goals keep changing, such as, getting married, birth of a child, deciding to take a home loan etc. Ideally, before these events happen, the wealth managers like us must be consulted to reset entire portfolio. Also, at pre-set date in a year, like on your birth date or post any major market movement/event; one must review entire portfolio with their wealth manager and re- align it if needed towards financial needs, objectives and goals .
Wealth management without estate management, risk and tax management is incomplete. We need to evaluate these aspects as well.
Also one must involve immediate family members in the process of financial planning and wealth management. Doing this would mitigate lot of risk, just in case the bread –winner were to die before time.
Having looked at all these aspects, wealth management can be a rewarding experience that can help fulfill your aspirations and dreams.
We at Graded Financial Services, work in close coordination with CA, Attorneys and Bankers of the client to form a holistic financial solution. We also believe in building deep, long lasting and multi-generational relationship with our clients. Therefore, many a times we go beyond call of our duty, to assist our clients in tackling various non-financial issues of their life as well; subject to we having wherewithal and resources to do so.
We believe that every client’s financial objectives and goals are unique and hence, there cannot be a fit to all solution. Therefore, we tailor make solutions to suit every client’s specific needs and preferences.
Graded Financial Services, bring at your door step suitable investment opportunities in-terms of flag -ship products and services of renowned corporations, operating in equity, debt, commodity markets, as well as in the space of loan and insurance.
We construct and customize solutions basis outcome of your ‘Financial Review and Planning’, by adopting the following process:
Assessing profile and risk appetite of the client, sizing current assets and liabilities, income and expenses and also factoring contingency plan for the client and his/her family.
Identifying short, medium and long term financial needs and goals of the client.
We carefully study the Information gathered during the process of financial review, ascertain the obstacles which may occur in the process of achieving the goals.
Financial Plan would detail client's financial needs and goals at Present value and at Future value, factoring interest rate and inflation. We would present the plan to client and obtain client’s agreement on implementation strategy.
Guiding and assisting client in executing the agreed strategy by suggesting appropriate investment options, products and services to move the plan towards achieving the goals.
Closely track the performance of all the financial products and instruments in which client has invested. Also, would periodically review plan vs achievements along with the client, and rework the plan if need be.