Financial and investment decisions are an important part of any successful plan. But did you know there’s more than meets the eye when it comes to these two disciplines? It’s a good idea to understand their unique differences, as well as their corresponding professional designations. To best serve your interests in both disciplines, let’s take a deeper dive to get familiar with the distinctions between financial planning and investment management.
Financial Planning vs. Investment Management
According to the CFP Board, financial planning is a collaborative process 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
And at the Center for Wealth Management, our team is made up of CERTIFIED FINANCIAL PLANNER™ professionals.
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. 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 the Center for Wealth Management, our team focuses on six key areas: accumulation, risk management, taxation, business planning, retirement planning, and estate 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 our minds together to design a customized, strategic approach to your affairs. We base our strategy on a comprehensive financial planning process, always keeping your most important goals and values in mind. Below is an outline of the steps we take with each and every client:
- Discovery: We get to know you first. In addition to learning about your financial goals, we get to know you as a person so we understand your values, money mindset, and vision for your future.
- Data Gathering: We collect facts and figures about your current financial situation. This helps give us an idea of the gap between where you are now and where you want to be.
- Analysis: In this step, we model projections of various possible scenarios and analyze the probability of success for each based on your current financial picture and potential adjustments that could be made to get you closer to achieving your personal financial goals.
- Recommendation: Next, we present to you the findings of our analysis and discuss the recommendations we feel will help you to accomplish these goals in the most efficient manner.
- Implementation: Once you’re confident and comfortable with the recommendations, we help to implement your plan and get you started on your path to success.
- Periodic Review: The work doesn’t stop here. We review your plan regularly to measure success, take into account any changes in your life or the world around you that may impact your plan, and make adjustments as necessary.
A key component of financial stability is to prepare for the unexpected. We create strategies designed to help you through any obstacle you might face in the future. We also work with other professionals in your life, such as your CPA and attorney, to coordinate the implementation of your plan.
Are You Looking for Comprehensive Financial Planning?
Working with a trusted financial partner is one of the most important decisions you can make for your financial future. Whatever you hope to achieve, it’s our mission to simplify the complexities of your financial life so you can focus on what matters most—all while putting your best interests first. To get started, schedule a free introductory meeting online, call (248) 220-4321, or email me at justin@cwmfinancial.net.
About Justin
Justin Williamson is a senior partner and co-owner of Center for Wealth Management, an independent, fee-based wealth management company in Troy, Michigan. Justin has been serving clients in the financial services industry since 2001. He spends his days helping his clients achieve their financial goals and make the best decisions for their families so they can spend time on what they love and experience financial peace of mind. Justin is known for his dedication, integrity, personal touch, and ability to simplify complex issues. Justin specializes in serving engineers and other professionals who are close to retirement or recently retired and helping them maximize their benefits and create a retirement plan they can rely on. He is a seasoned public speaker and presents at numerous corporate events each year on retirement planning, Medicare, Social Security, and other financial topics. Justin has a bachelor’s degree in Business Administration majoring in Personal Financial Planning from Central Michigan University and is a CERTIFIED FINANCIAL PLANNER™ practitioner.
Outside of work, Justin enjoys spending time with his family. He lost his wife of 18 years, Heather, to brain cancer in 2020. He and his son, Carter, and twin daughters, Jaden and Kelsey, work to honor her and make her proud each day. Outside of work, you can usually find him coaching baseball, softball, and basketball, and spending time at their family cabin at Higgins Lake. Learn more about Justin by connecting with him on LinkedIn.