By Jim Shellenberger, CFA, CFP®
Financial professionals offer a range of services, from investment advice and management to financial planning and wealth management. Although these terms are often used interchangeably, they involve different processes and outcomes. It’s a common misconception that these terms are synonyms for the same thing, but that couldn’t be further from the truth.
Understanding the distinction between financial planning and investment management is crucial in identifying the service that best meets your needs. In this guide, we’ll explore the differences between financial planning and investment management and outline what you can anticipate from each of these services.
Financial Planning vs. Investment Management
According to the CFP Board, financial planning is a collaborative process (1) that helps maximize a client’s potential for meeting life goals through financial advice that integrates relevant elements of the client’s personal and financial circumstances. Essentially, it’s a holistic process that looks at all parts of a client’s financial situation to create a customized plan to achieve their financial goals. It includes the following subject areas:
- Retirement planning
- Education planning
- Tax planning
- Investment planning
- Estate planning
- Risk management and insurance planning
Investment management on the other hand, aims to meet particular investment goals for the benefit of clients whose money a financial professional has the responsibility of overseeing. (2) It is a siloed service that does not necessarily incorporate the other aspects of a client’s unique financial situation. Financial planning usually includes investment management, but investment management does not automatically include financial planning.
Our Financial Planning Process
At Elevate Wealth Management, our team focuses on four key areas: advice and planning, investment management, estate planning, and retirement planning. While other advisors often do a few of these things, they typically don’t do all, and many times they only focus on investment management.
Throughout our process, we put all hands together to design a customized, strategic approach to your affairs. We base our strategy on the comprehensive financial planning process and we always keep your most important goals and values in mind. Below is an outline of the steps we take with each and every client:
- Initial Call: During this discovery call, we prefer to have an open conversation rather than just presenting a sales pitch. We learn more about your needs, provide a high-level overview of Elevate Wealth Mangement’s services, and identify which services are the best fit for you.
- Going Through Our Panoptic Life and Financial Plan: This allows us to better understand your financial situation so we can take proactive financial planning measures.
- Your Risk Assessment: Now that we have an idea of your financial situation, we want to understand your view on risk and returns to make sure we build a strategy catered to your financial goals and comfort zone. If there is a disconnect between those two, we need to have a conversation to make sure we are on the same page with our plan of action.
- Account Setup: We first deliver disclosure documents and then get the Investment Advisory Agreement signed. Next, we get your account set up at Fidelity, Schwab, or TD Ameritrade.
- Observations/Recommendations: The final step is a deep-dive meeting that reviews previous conversations and looks forward with the financial planning recommendations. It includes suggestions from all relevant areas and covers referrals in areas where you may need additional assistance. This interactive process involves your input and conversations about how the plan may change.
At the end of this process, we have created a living document that can be updated over time as your financial goals evolve. The process doesn’t stop just because the plan was completed. Comprehensive financial planning is an ongoing service that allows us, as planners, to truly maximize your ability to pursue your long-term financial goals with confidence.
Make the Most of Your Money
If you’re seeking an all-inclusive financial plan that encompasses strategic investment management, we would be thrilled to hear from you. At Elevate Wealth Management, we’re proud of our comprehensive approach to wealth management, and we’re committed to supporting our clients in realizing their financial dreams. Schedule an introductory meeting by reaching out to us at firstname.lastname@example.org or 307.673.5675.
Jim Shellenberger, CFA, CFP® is a financial advisor at Elevate Wealth Management, an independent, fee-only wealth management firm serving young professionals, pre-retirees, and retirees in Sheridan, Wyoming, and surrounding areas. With the mission of serving and educating, Jim is dedicated to providing comprehensive, top-notch services that not only help his clients reach their goals, but also empower them to make the best financial decisions for their lives and walk toward their future with confidence. Jim is known for going the extra mile, not only offering valuable knowledge in investment management as a former investment analyst, but building long-lasting relationships so he can give honest, customized advice and strategies that make an impact on their lives.
Jim has a bachelor’s degree in business administration with a minor in finance from the University of Wyoming. He is proud to be a Wyoming native and loves exploring the outdoors with his family—hiking, fishing, hunting, and backpacking. Faith is an integral part of Jim’s life, and he always looks forward to attending church on Sundays, Bible study on Fridays, and being part of his church community. He’s also an avid sports fan! Fun fact: Jim owns shares in the Green Bay Packers. To learn more about Jim, connect with him on LinkedIn.
The views expressed represent the opinion of Frontier Asset Management. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness. While Frontier Asset Management believes the information to be accurate and reliable, we do not claim or have responsibility for its completeness, accuracy, or reliability. The use of such sources does not constitute an endorsement. Frontier does not have an affiliation with any author, company or security noted within. Statements of future expectations, estimates, projections, and other forward-looking statements are based on available information and the Frontier Asset Management’s view as of the time of these statements. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties. Actual results, performance or events may differ materially from those expressed or implied in such statements. Investing in securities involves risks, including the potential loss of principal. Past performance is not indicative of future results.
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Elevate is the financial planning division of Frontier Asset Management. Frontier Asset Management is a Registered Investment Adviser. The firm’s ADV Brochure and Form CRS are available at no charge by request at email@example.com or 307.673.5675 and are available on our website www.frontierasset.com. They include important disclosures and should be read carefully.