Difference Between Financial Planning and Portfolio Management

Vsrk Wealth Creator

Description

Planning Finance or Managing Portoflio are not similar things. Talking about financial planning, it is a detailed-method of developing overall financial goals and creating a plan of action to achieve them. So there is big diffrence betweeen Financial Planning and Portfolio Management.
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Sujets

• Financial planning (business)
• Portfolio Management for New Products
• Portfolio management

Informations

• Publié par: vsrkwealthcreator
• Publié le: 02 janvier 2020
• Nombre de lectures: 5
• Langue: English
• Poids de l'ouvrage: 1 Mo

Extrait

DIFFERENCE BETWEEN FINANCIAL PLANNING AND PORTFOLIO MANAGEMENT

M U T U A L F U N D S , I N S U R A N C E , F I N A N C I A L P L A N N I N G

Investments and Financial Advising

INTRO

Financial planning and portfolio management are one

of the most popular concepts which come to our

mind. They are often the answer to the various

questions such as how much should be saved for

important things like retirement, child’s education and marriage etc. Since these terminologies are interrelated, they are often used inter irreplaceable, however this is not the case. There are a lot of differences between the same.

F I N A N C I A L P L A N N I N G V S . P O R T F O L I O M A N A G E M E N T

01

F I N A N C I A L P L A N N I N G V S . P O R T F O L I O M A N A G E M E N T

02

Talking about financial planning, it is a detailed-method of developing overall financial goals and creating a plan of action to achieve them. It is also called wealth management as it provides you a workable framework for designing and achieving your life goals in a systematic manner by preparing for shocks and surprises. It encompasses essentials financial details about your income, savings, debts, investments, insurance, etc.

W O R L D O F P M S

03

PORTFOLIO MANAGEMENT IS, COMMONLY KNOWN AS INVESTMENT

MANAGEMENT, ALL ABOUT THE TECHNIQUE OF MAKING THE RIGHT

DECISIONS ABOUT INVESTING IN VARIOUS FINANCIAL PRODUCTS &

OPPORTUNITIES. IT COMPRISES THE IDENTIFICATION OF INVESTING

NEEDS OF THE INVESTORS, MATCHING THE OBJECTIVES TO

EXISTING INVESTMENT OPPORTUNITY, ASSET ALLOCATION FOR THE

CLIENTS, WITH THE AIM TO MAXIMIZE RETURN AT A GIVEN LEVEL OF

RISK APPETITE.

Portfolio Management Company in India

04

AIM

Financial planning is all about planning, managing and budgeting for your estimated financial needs. Portfolio management is provided by financial professionals that create and recommend portfolios of stocks, bonds, mutual funds, exchange-traded funds (ETFs) or alternative investments to meet the investment objectives of a specific investor. Portfolio managers are focused on meeting the needs of investors through the rate of return achieved within a portfolio and they are often responsible for re-balancing the account to remain in line with the investor’s allocation preferences and risk tolerance. They perform day to day trading decisions on a portfolio of assets.

While comparing both the concepts, it is clearly visible that financial planning is a

wider concept than portfolio management

as it is involves a much more comprehensive and detailed process than portfolio management.Financial planning

covers many areas such as building an emergency fund, saving for a new home or reducing debt, accumulating retirement

assets, saving for a child’s college fund,

estate planning or creating tax efficiency.

05

SCOPE

06

OBJECTIVE

Wealth managers give advice and help to

enhance the overall financial situation of

their clients while investment manager is

concerned only to that particular portfolio

he is assigned to manage.

On one hand, Financial planning involves a

deep assessment of an individual’s overall

financial standing with the intention of

developing long term financial goals which

requires a recommendation on certain

products based on the individual’s goals.

On the other hand Portfolio management is

the assessment of various components of

portfolio so as to make various investment

decisions such as investment or divestment.

07

ASSESSMENT

W W W . W O R L D O F P M S . C O M

PORTFOLIO MANAGER VS. FINANCIAL ADVISOR

08

A professional who assists in financial planning is referred to as ʏFinancial Advisorʐ or ʏWealth Managerʐ. The one who provides the services of portfolio management is known as ʏPortfolio Managerʐ.ʏPortfolio Managerʐ and ʏFinancial Advisorʐ are often deemed as one but in fact both of them are distinct professionals

and do not perform the same function. Portfolio managers are

responsible for creating and maintain an investment account, while

financial advisors sell a specific product or service.

09

SERVICES INCORPORATED

A F I N A N C I A L P L A N N E R 10 P R O V I D E S A V A S T A R R A Y O F F I N A N C I A L S E R V I C E S , I N V E S T M E N T A D V I C E , T A X A N D A C C O U N T S S E R V I C E S , R E T I R E M E N T A N D O T H E R P L A N S T O T H E I R C L I E N T S . P O R T F O L I O M A N A G E R S A R E C O M M I T T E D T O G I V E C L I E N T C E N T R E D A D V I C E T H A T S U I T S T H E I R C L I E N T ’ S P O R T F O L I O . W E A L T H M A N A G E M E N T H E L P S T O E N H A N C E F I N A N C I A L S I T U A T I O N O F A N I N D I V I D U A L O R A C O M P A N Y .