What Is Financial Planning & How Is it Different From Investment Management?
By Will Paustian, CFP®
There are many different ways to describe the services provided by financial professionals; investment advice, investment management, financial advice, financial planning, and wealth management are just a few. There is a common belief that all these words are just synonyms for essentially the same thing, but that’s just not the case. Each of these services involve different processes and deliverables. In this guide, we’ll discuss the difference between financial planning and investment management and what you can expect from working with JGP Wealth 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
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 JGP Wealth Management, our team focuses on nine key areas: retirement planning, cash flow, lending, estate planning, tax coordination, education planning, charitable, and asset management/investments. 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 learn more about your needs, provide a high-level overview of JGP’s services, and identify which services are the best fit for you.
- Leading up to the Discovery Meeting: We request that you upload your documents and information to our secure client portal, which we will use to prepare questions and inform us ahead of the discovery meeting.
- Discovery Meeting: During this one-hour meeting, we paint the whole picture in order to diagnose which areas to address in the holistic financial planning matrix. This is also when you have the opportunity to ask questions and bring up lingering concerns.
- Evaluation and Review: Our team then uses the next couple of weeks to prepare a thorough proposal for you. The plan will incorporate input from the planning team, the investment committee, and the advisor—a holistic approach to ensure nothing is missed or overlooked.
- 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 nine key areas listed above 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 achieve your long-term financial goals.
Are You Looking for Comprehensive Financial Planning?
If you are looking for comprehensive financial planning that includes strategic investment management, we would love to hear from you. At JGP Wealth Management, we take pride in our holistic approach to wealth management and are dedicated to helping our clients achieve their long-term financial goals. To set up an initial call, reach out to me at email@example.com or 503-446-6450.
Will Paustian is a financial advisor at JGP Wealth Management, an independent, fee-based financial advisory firm in Portland, Oregon. Since joining the JGP family in 2020, Will has played an integral role in the firm by combining his knowledge of the financial world with a strong and dedicated work ethic in order to help our clients achieve their financial goals. Will is known for his commitment to walking our clients through everything they face in their financial lives, celebrating their victories along the way. He specializes in serving executives and entrepreneurs, specifically in the food and beverage industry and business owners planning to pursue an exit, tailoring his solutions to fit their unique financial challenges and opportunities.
Will graduated from the University of Oregon’s Robert D. Clark Honors College with a bachelor’s degree in finance and entrepreneurship, minoring in economics and is a CERTIFIED FINANCIAL PLANNER™ professional. He was awarded the Stamps Leadership Scholarship and served as a student trustee on the University Board of Trustees. He also spent time abroad in the UK studying behavioral economics at the University of Oxford. When not in the office with clients, Will enjoys a wide variety of activities, from hiking and fishing to cycling and traveling. He, along with his family, enjoys the sights and sounds of Oregon, cheering on the Oregon Ducks and the Portland Trailblazers and exploring the unique restaurants and businesses around the Portland area. To learn more about Will, connect with him on LinkedIn.