The Difference Between Comprehensive Planning & Investment Management
At Pathway Financial Planning, we offer a wide range of services. So wide in fact that when we went through all services our list was over 100. We boiled these down to seven key pillars and our Path to Purpose FORMula was built. Our seven main areas of service are wealth management, risk management, tax planning, legacy planning, cash management, philanthropy, and value-added services.
We find that out of all of these services, most often we work with two different types of clients; comprehensive planning clients (usually those nearing or entering retirement) and investment management clients. Comprehensive planning is long-term planning aimed at setting clients up for financial stability throughout the course of their life. Investment management is our way of guiding those wanting to invest funds to help protect and grow wealth over time. It’s important to understand the difference so you can make smart financial decisions based on your specific needs.
Comprehensive planning is a term you’ll hear often in the financial planning world. What the term boils down to is building a personalized plan around your long-term financial goals. The idea is to grow, or maintain and distribute your wealth over time with an in-depth educated strategy. Broken down, with comprehensive planning you make financial goals and then craft an attainable plan to reach them.
It’s important to really dig into your core values and goals so the plan is specific to your lifestyle. Planning for the future can be tricky and a bit daunting. Approaching it head-on while making informed decisions and guided by a trusted financial professional can give you peace of mind and confidence in your financial decisions.
Comprehensive planning can entail so many different aspects of a person’s financial life. Retirement accumulation and distribution are the big ones, but other financial matters that can arise such as saving for the kids’ college education, planning for a second home or retirement home, or the issue that doesn’t get enough attention - how to be tax-efficient and smart when inheriting money. There’s no doubt, a good financial planner will add value to your financial life beyond simply where or how to invest. Proper planning can help get you where you need to be. A trusted financial planner will assess your current financial situation and help create a plan best suited for you.
They will also continually assess your plan, any critical financial events (such as the birth of a child, loss of a spouse, health issues, etc.) that could affect your plan, the adaptability of your portfolio based on any changes, and adjust when necessary.
We think of investment management in terms of asset allocation. In other words, how much of your finances you distribute to stocks, bonds, cash, etc. Working with a trusted financial professional can be a great way to successfully build your portfolio. This is a very important part of your overall process and an area in which we at Pathway Financial believe we provide value.
Another term for investment management is wealth management. The goal is to have a financial planner provide guidance throughout the investment process so you can understand every financial decision. Although some people don’t necessarily want to know the “why” behind every investment decision, they do want to know each decision is made with a purpose. Planners can also monitor your finances and adjust as needed to in order to keep everything aligned with your plan.
How Pathway Financial Works with Clients
We work often with both comprehensive planning clients and investment management clients.
What we look at:
Long-term tax analysis to identify tax efficiency opportunities.
Risk mitigation for things such as long-term care, death of a spouse, disability, etc.
Cash flow planning matters: when we intend to take & how we coordinate social security, debt reduction plans, pension decisions, spending needs, etc.
Estate planning issues: understand what you’ve put in place, advise if we think you should talk to an attorney about trusts, wills, POA’s, life estate interests, etc., and maybe discuss things like “memory investing.”
When explaining the extent of our services, many people become curious about how much it all will cost. One of our core principles is being open about everything we do, including fees. In order to be transparent, we have written out the process of working with us step-by-step, and we’re always forthright with what everything costs. The difficult thing about fees is, they range from plan to plan and investment to investment. As the old saying goes though, “If you think the cost of good advice is too expensive, try bad advice.” That’s not to say our fee structure is expensive or that we can’t lower fees for the fee conscious client. Perhaps a better-focused question is, “What value will I receive in exchange for the fees I’m paying?”
We love answering this question.
The Path to Purpose FORMula
While we work frequently with these two types of clients, there are other key services we provide at Pathway Financial. It’s important to us that we select the services that best suit your needs and the areas that require focusing on first. However, our Path to Purpose FORMula is really designed to continue to meet your needs as your life unfolds. Over our years of experience, we’ve come to understand that what will be relevant to you 15 years from now, may not be all that relevant today. Life changes! Below we listed and expanded on a few of our other key pillars.
Risk Management: This pillar is broken down into two different areas: personal risk and investment risk. Our in-depth analysis uncovers areas of personal risk that may be mitigated by life, long-term care, key person, or disability insurance. With investment risk, our goal is to make sure you are invested in a way that is in line with both your overall risk appetite and the current risk/reward dynamics of the market.
Legacy Planning: We know it may be important for you to take care of your family after you pass away. It's important to note that while much of this planning is centered around what happens next, we can often find ways of shifting assets during your lifetime so you can experience the joy of seeing the fruits of your gifting.
Philanthropy: This is important to many of our Ideal Clients and it’s pretty important to us at Pathway too! Typically, with philanthropy, we're referring to the ways your estate can impact different charitable organizations. Sometimes this can encompass family member's lives or be in-memorial of a loved one who has passed. No matter your reason or goal for being philanthropically minded, there are ways we can assist in carrying out your wishes when you pass away, or even during your lifetime.
At Pathway Financial Planning, we are part of USA Financial and consider them an integral part of our team. We are not product pushers. Our philosophies align in the fact we believe everyone’s situation is unique and requires thoughtful analysis, careful planning, and frequent ongoing communication. We believe that exceptional service is key to providing value to clients and structure our business around that belief.
Our first step with potential clients is to set up a formal meeting. After this meeting, we like for both parties to take about 48 hours to consider whether there is a good fit for us to work together. We want you to feel confident in your decision to move forward in working with Pathway Financial and feel this time is important for a successful process. To learn more, email us at firstname.lastname@example.org and a member of our team will be in touch.