Titles in the investment industry can often be convoluted and confusing. Wealth manager, financial advisor, financial consultant, financial planner, CFA, CFP, CDFA… How are you supposed to know the difference? At Demand Wealth, we wanted to be decidedly simple and transparent, so the services we offer can be broken up into two distinct categories: Financial Planning and Investment Management.
Financial planning involves taking a comprehensive look at your entire financial situation and developing concrete steps to help you achieve your goals. You can think of this part of our business as an old-school GPS. We look at where you are, we figure out where you want to go, and we lay out clear steps that will bring you to that point.
Financial planning doesn’t include the actual managing of your money (investments), but rather consists of the following:
• Retirement Planning
• Budget Planning
• Insurance Review
• Annuity Review
• Education Planning
• Elder Planning
• Debt Review
• Tax Efficiency Review
• Estate Planning/Account Titling/Wills/Trusts
• Risk Assessment
Investment Management simply involves the management of your investments. Once you establish trust with an organization to manage your investments, they help you determine your risk tolerance and manage your money in a way that accords with your goals. This service functions more like a veteran chauffeur than a GPS. You work with your driver to figure out where you’re at, where you’re going, and how you want to get there, and they’ll navigate your portfolio accordingly with safety and efficiency.
Rather than looking at your entire financial picture or developing a step-by-step plan, investment management involves monitoring your investment portfolio regularly and actively looking for opportunities to optimize the performance and risk of your portfolio. Investment management primarily includes:
• Risk Assessment
• Portfolio Management
• Asset Allocation (Diversification)
• Daily Monitoring
• Portfolio Rebalancing
• Portfolio Tax Optimization (aka Tax-Loss Harvesting)
The intersection of investment management and financial planning will provide you with a comprehensive roadmap to get from point A to point B. If you want to go on a road-trip filled with adventure, you can leave your map at home, but if you want more confidence, financial planning and investment management might make sense for you.