What Is Financial Planning & How Is it Different From Investment Management?

By Chris Palabe, CFS®, AIF®

When it comes to choosing a financial advisor, you have many options. One distinction you should understand is whether your advisor solely focuses on investment management or if they offer comprehensive financial planning. 

To understand the distinctions between the two, let’s look at the differences between financial planning and investment management, and then we’ll show you how Palabe Wealth approaches our clients’ unique situations. 

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 Palabe Wealth, we focus on individual retirement planning and retirement plan solutions for business owners. Our individual retirement plans are uniquely tailored to the needs of each client. In determining your customized retirement plan, we work through a detailed process together.

Throughout our process, we design a customized, strategic approach to your affairs. We base our strategy on this comprehensive retirement 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:

1. Initial Call: During this discovery call, we learn more about your needs, provide a high-level overview of our services, and identify which services are the best fit for you.
2. Leading up to the Discovery Meeting: We request that you provide your documents and input information to our secure client portal, which we will use to prepare questions and inform us ahead of the discovery meeting.
3. Discovery Meeting: During this 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.
4. 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 a team of experienced advisors —a holistic approach to ensure nothing is missed or overlooked. 
5. 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 six 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 retirement goals evolve. The process doesn’t stop just because the plan was completed. Comprehensive retirement 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 retirement plan analyses, portfolio management, tax strategies, and more, we may be a good fit. We take pride in our holistic approach to wealth management and retirement planning and are dedicated to helping clients pursue their long-term financial goals. Schedule a 15-minute introductory phone call or call us at 847-249-6600 to learn if we are the right fit for your financial goals.

About Elliot

Elliot Palabe is a Wealth Advisor at Palabe Wealth, a financial services firm providing retirement plan solutions for businesses and individuals. Elliot is pivotal in crafting the firm’s brand to best communicate the valuable services they provide for their clients. He helps the Palabe team design individual retirement plans and structure and manage 401(k) plans. He is also passionate about helping the Millennial/Gen Z generation with financial planning and wealth creation. Elliot has a bachelor’s degree in finance from the Foster College of Business at Bradley University and currently holds the Series 6, 63, SIE, and 65 licenses. To learn more about Elliot, connect with him on LinkedIn.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This material was prepared for Palabe Wealth Inc.’s use.