Wealth management is not just for the Mark Zuckerberg’s (News - Alert) and Warren Buffet’s of the world. Despite the misleading term, you do not have to be overly wealthy to reap the benefits from strategic wealth management. Simply speaking, wealth management is the practice of offering guidance about one’s finances and it pertains to a wide range of areas, from financial planning, credit lending, and insurance to education savings, retirement planning, and taxation. At the core of wealth management are financial planning and portfolio management, each of which works uniquely to build more financial security. The bottom line is that wealth managers are in place to help you achieve your financial goals.
Kevwe Yerifor, the Chief Investment Officer at Capital Intell in Calgary, Alberta, has helped many clients achieve their monetary objectives in the twenty years he has worked in the Financial Services industry. An expert financial consultant, Yerifor is a member of the Investment and Wealth Institute USA, he has an MBA from the University of Bradford and gained his Investment Management education from the Yale School of Management. His notable career makes him a leader in the industry, and thus the perfect person to offer his insight into the world of wealth management. Continue reading for a breakdown of ways in which Kevwe Yerifor claims people of all income levels can benefit from wealth management.
Before diving into the ways in which you can put your newly learned financial knowledge to the test, it is important to have an understanding of the core principles of wealth management.
Financial Planning
Much as the term suggests, financial planning is the act of forecasting your future monetary needs. Financial planning involves all aspects of financial needs including, saving and investing, paying down debts, insurance, taxes, and retirement planning. Kevwe Yerifor states that the most important takeaways from financial planning are:
- Identifying and prioritizing your goals
- Identifying where and how you can save money
- Developing a clear picture of your finances
In addition to addressing the above aspects, a financial plan will help you worry less about money and help you to focus on the bigger picture. According to Kevwe Yerifor, financial planning is a must for anyone, you need to understand where your finances are at and how you can better position yourself moving forward. Financial planning does not need to be an overly complex system that confuses you more than helps you, there are plenty of online tools that can help you begin your planning.
Portfolio Management
Portfolio management is the second aspect of wealth management that requires the utmost care to detail. An investment portfolio is a combination of unique investments to help the owner of the portfolio achieve their financial goals. Portfolio management is the act of creating and monitoring an investment account with the goal of maximizing the investment’s return, simply put, this means that the goal is to make the most money on your investments. A professional and licensed portfolio manager will manage the portfolio on behalf of the owner, but you do not need to be a professional to have your own self-directed investment portfolio. Kevwe Yerifor states that a self-directed portfolio is a portfolio that is managed by the owner, and can be either passive or active, meaning that a passive account is set up with a long-term strategy in mind for you to leave it and let it grow. Whereas, an active account involves management in order to beat the expected rate of return. For first time investors, it is strongly advised you choose a passive account as it is indexed to a market and is intended to be left alone.
Portfolio management is much more complicated than financial planning as it involves several key elements that need to monitor. These key elements include but are not limited to, asset allocation, diversification, and rebalancing tactics.
Now that we have a more concrete understanding of the most critical aspects of wealth management, it is time to dive into some of the ways the average person can leverage their wealth management campaign to benefit their lives.
Saving for Your Child’s Education
No matter your financial situation, most people with children will want to allocate some funds to pay for their child’s education. However, putting money in the bank for college is much easier said than done - especially with the growing cost of tuition. That is why wealth managers are here to ensure you produce and save enough money to pay for your child’s secondary education when the time comes. Kevwe Yerifor states that in these instances, it is common for money managers to consider each individual’s financial situation and then recommend a course of action. This course of action could include various investment options, ranging from less risky investments such as government bonds to riskier investments like gold.
Saving for Retirement
No matter your job, everybody needs to come up with a retirement plan. For those that don’t, you risk exhausting your savings in as little as three to five years after retirement. To avoid running out of money, it’s important to properly save for retirement while you’re still working, and a wealth manager can help you do this. According to Kevwe Yerifor, one of the roles of a wealth manager is to help you prepare for this significant life change, whether that means advising on investment vehicle options that suit you or simply calculating the total amount you will want to have saved by the time you retire. If you wish to reap the benefits of your decades of hard work, it’s important to have a retirement plan in place that will ensure you can live out your days comfortably.
Achieving Short-Term Financial Goals
While wealth management is certainly helpful for planning for retirement or sending a child to college, it can also help individuals achieve their smaller, short-term objectives. Kevwe Yerifor notes that money managers generally devise strategies based on a client’s long and short-term goals. Examples of short-term financial goals include purchasing a car, taking a vacation, or buying furniture for a newly purchased home. These might seem like small feats, but professional wealth managers can likely help you meet your goals in a much more effective way, and one that considers the impact these short-term goals may have on your long-term goals.
