Introduction

Financial vs Wealth ManagementBy Anthony Warr

"The majority of what the financial industry calls 'financial advice' is really just glorified product sales. What most people actually need is advice about how their investments fit into their overall financial plan, and more importantly their life". 

Financial vs Wealth Management By Anthony Warr

antthony warr

There’s never been a better time to be an investor. Strategies that were once reserved for large institutions at high fees are now available to every investor through low-cost funds and ETFs. Computing power has levelled the playing field. As we see further technology gains in the future the basics of investing will become more of a commodity. And there’s an abundance of self-help investment books, blogs, analysis and opinions from so called “experts”.

However, I don’t think it is the same for financial advice.  The majority of what the financial industry calls “financial advice” is really just glorified product sales.

What most people actually need is advice about how their investments fit into their overall financial plan, and more importantly their life.  This is what we call financial and wealth management

Both are necessary components for long-term success, but it’s important to understand the differences:

Wealth Management is about asset allocation, expected returns, risk tolerance and time horizons.
Financial Management is about making wise choices about the use of cashflow, debt, tax structures, estate planning and insurances.

Wealth Management is about portfolio construction and risk management.
Financial Management is about comprehensive financial planning and emotional management.

Wealth Management is about measuring portfolio performance against predetermined index benchmarks.
Financial Management
is about measuring your performance against your true benchmark — your goals.

Wealth Management is about allowing your money to work for you to help you reach your financial goals.
Financial Management is about helping people define their goals, dreams, desires and fears.

Wealth Management is about creating a portfolio that can survive severe market disruptions.
Financial Management is about creating a financial plan that can survive severe life disruptions.

Wealth Management is about growing and/or preserving your wealth.
Financial Management is about understanding why money is important to you personally.

Wealth Management is about where to invest a lump sum.
Financial Management is about how and when to invest a lump sum.

Wealth Management is about asset allocation.
Financial Management is about asset ownership.

Wealth Management is about creating policies for economic and market uncertainty.
Financial Management is about helping people make better decisions with their money in the face of uncertainty that is impossible to reduce.

Wealth Management helps you grow your asset to meet future needs.
Financial Management helps you plan and provide for future needs.

Wealth Management is about creating a long-term process to guide your actions in the markets.
Financial Management is about creating systems that allow you to spend less time worrying about your money.

Wealth Management is about reducing the anxiety that comes from the volatile nature of the markets.
Financial Management is about reducing the anxiety that comes from making important decisions with your money.

Wealth Management involves growing your wealth so some day you can become wealthy.
Financial Management involves figuring out what a wealthy life means to you.

To get the most out of Wealth Management advice you also need well thought-out Financial Management advice.  And this is why we, at WARR HUNT, call ourselves Financial and Wealth Managers.