How Financial Planning Differs from Asset Management

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Meet with us!There are a lot of nuances to keep track of in wealth management. It’s a term that means different things to different people, but the end-goal is to maximize long-term wealth. Whether that means saving money, investing, or a bit of both, it’s built on a holistic approach to finances.

With that in mind, wealth management is more of an umbrella term. It encompasses two critical services that a financial advisor provides: financial planning and asset management. The latter helps manage all kinds of assets. This includes stocks, bonds, mutual funds, and ETFs. It’s the stereotypical investment style you see on movies that depict Wall Street.

Financial planning is a little more challenging to define. It’s a comprehensive assessment of your financial situation and future goals. While that may sound pretty straightforward, there’s a little more to it. Because of that, we’re going to help break down the most essential aspects of financial planning and how it differs from asset management.

Financial Strategy Comes First

The most crucial part of financial planning is a strategy. You can’t go into it blindly and work through things on the fly. If you’re having trouble doing this by yourself, a financial advisor can help you identify your goals and help build a strategy to focus your efforts.

Of course, strategizing your financial planning is nothing without transparency. If you’re speaking with a financial advisor, you have to be open and honest. You wouldn’t go to a doctor’s office and tell them you have a minor cough if you’ve had a fever and night chills for the past week. Give a financial advisor that same honesty and they’ll be able to help you much better.

Tell them about your financial goals — whatever they may be. This is a no-judgment zone. It doesn't matter if you’re trying to plan for your children’s financial future or saving towards a big purchase. Once you and your financial advisor have identified what your goals are, they can help map your road to hitting those goals. You can sit together and analyze and evaluate your current financial status.

A Marriage of Financial Services

Financial planning and asset management often go hand-in-hand. Sometimes the best way to achieve your financial goals is through the right investments. They're somewhat symbiotic in this sense. Financial planning could take the form of asset management and vice-versa.

Keep in mind that financial advisors who specialize in financial planning or asset management may have the same qualifications. They can either have a Certified Financial Planner (CFP) or Chartered Financial Analyst (CFA) designation. While a financial planner or asset manager doesn’t need to have these designations to work — it’s helpful for a client to work with a professionally recognized advisor.

Some firms focus solely on financial planning, while others focus on asset management. Ocean Wealth specializes in both with a team of financial advisors that has years of industry experience. This experience translates into invaluable insights that can help you reach your financial goals with care and confidence. Contact us today to take the first steps towards a better and more secure financial future.

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