In some cases, a financial plan may include recommendations for portfolio management as part of the overall strategy for achieving your goals. However, financial planning and portfolio management are not the same thing.
A financial plan will focus on a wide range of financial planning activities beyond just portfolio management. This will include an outline of your financial goals and objectives and will provide a roadmap for achieving them. Depending on situation, it may include budgeting, saving, investing, debt management, insurance planning, retirement planning, and estate planning. The purpose is to help a person make informed financial decisions that will help them achieve goals.
On the other hand, portfolio management refers to the process of selecting and managing a collection of investments, in order to meet specific financial goals. Portfolio management may involve selecting individual stocks, bonds, mutual funds, or other investment vehicles, as well as determining the appropriate asset allocation for the portfolio based on your risk tolerance and financial goals. The goal of portfolio management is to maximize the portfolio's return while minimizing risk - both of which are intended to achieve outcomes of your portfolio plan.
Fee-only professionals, including financial advisers, can play a crucial role in helping individuals with their financial planning needs. These professionals have a fiduciary duty to act in their clients' best interests, which means their advice is unbiased and solely focused on helping clients achieve their financial goals. They can provide a comprehensive analysis of an individual's financial situation, develop a customized financial plan, and offer ongoing guidance to ensure that the plan stays on track. Whether it's creating a retirement savings strategy, managing investments, or navigating tax implications, fee-only professionals can provide the expertise and guidance needed to make the most of one's financial resources.
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