I Often Hear the Term “Wealth Management” the Same as Financial Planning?

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Is wealth management the same as financial planning?

The term “wealth management” means different things to different advisors. However, in most cases it encompasses a broad approach to assisting individuals and families to accomplish their financial goals. Specific disciplines within the wealth management process may include financial planning, investments, risk management, and estate and legacy planning. Therefore, the broader umbrella of wealth management includes financial planning but can also include other areas of expertise.

Do you need Wealth Management or Financial Planning?
Generally speaking, if a person has finances, they can benefit from financial planning. It is for anyone who is goal-oriented and organized in his or her approach to wealth management.
Financial planning involves a great many areas of technical expertise, so it is difficult for most of us to find the time and education to manage every aspect. Even if you were to become an expert in one area, it’s possible that without professional guidance, planning decisions you make in one area will negate or be in conflict with decisions made in other dimensions of the plan. Ideally, it helps to have advisors involved that know something about each of the areas of planning. This allows for plan integration and the elimination of conflicts.

Is wealth management the same as financial planning? No but figure out what you personally need.

Wealth management is a specialization, so it is important to get your feet wet in the industry first. Earning a designation like the Chartered Financial Analyst® will give you the deep knowledge you need to analyze investments, stocks, bonds, hedging strategies, financial statements, and other macro and microeconomic factors that could impact markets. The CFA® exam process takes a minimum of three years, and the competition is fierce. But, it will give you comprehensive understanding of financial markets and how they relate to one another. To learn more about the path to CFA, visit Kaplan Schweser.

The CERTIFIED FINANCIAL PLANNER™ certification is another good option for someone looking to become a wealth manager. The CFP® certification will give you fundamental understanding of general financial planning principles, risk management, investment planning, tax planning, retirement and income planning, estate planning, and financial plan development. Unlike the CFA program, you can earn the CFP® mark in as little as one year. Learn more about CFP® certification at Kaplan Financial Education.