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Managing wealth and finance is NOT identical

Wealth management and financial management – how do they diversify?

By the context wealth management, we understand it's about managing one's wealth. It predominantly deals with the protection and accumulation of wealth. Wealth management is what makes investors look up for profit-making opportunities.

Businesses who engage in wealth management deal with wealth managers, to find ways to preserve the existing wealth and also look for opportunities to accumulate more. Precisely wealth management is all about preserving what you have at hand, and looking for more wealth to secure future. Wealth management engages in risk management, investment portfolio management, planning activities and capital gain assessment.

Financial planning is a term on the other hand, primarily associated with the individuals wealth. The concept of financial planning has been spread as a misunderstanding, in the form of investing in insurance and mutual funds.

Financial planning simply is a process by which a person will be able to achieve day to day life financial goals by aligning the finances for future requirements. Which includes an outline of expenses, savings and income, thereby keeping oneself and their family secured.

The roadmap of financial planning should be followed irrespective of income levels. The income level of a person is determined to assess the primary aspects of financial planning. First the number of goals, and second the quantitative measure of the goal. Here the goal is personal finance.

Precisely the objectives which you can achieve by investing the finances that you have secured, for example a person working the 9 to 5 shift may dream of starting his own business, better retirement or family's future protection. Financial planning is securing and investment in the structure, planning out an outline of expenditure, and also forecasting ways in which income can be made.

Wealth management vs financial management

What does financial planning do separately?

Unlike wealth management financial planning takes into account the current financial situation of the person. This current financial situation include the risk profile and measurable goals of a person. Factors such as budgeting, tax planning, assets and liabilities, need for insurance, and retirement planning all fall under the purview of financial planning.

The clarity and direction to every financial decision is derived from financial planning.

Is financial planning for the rich only?

Well if you are making an income every month or every day and if you are able to pull out money, you can plan for your financial health. A misconception is financial planning can only be carried out for the rich who has ample. The concept of enough money stands out to be a mess, because with increasing advertisements all around, man's need does not subside. With increase in income, needs and expectations also increases

How much money you have has nothing to do with financial planning. How can you invest the money you have, to secure yourself for the future is what financial planning does. Wealthy people tend to invest more because of the fear of losing the financial security. This helps them in channelizing their wealth to get better returns and fulfill their needs.


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Poor Money management and lack of financial planning drives people into a financial mess. Financial planning include the following:

Awareness and core differences

Financial planning deals with day-to-day aspects. If you have cash in your pocket you need to plan to ensure best use. Wealth management deals with the idea of preserving what you are leaving behind at home. Clear cash is not the only constant taken into account. Land, property, furniture and fixtures all come under the purview of wealth management.

  • No need of active participation in case of financial planning. A financial advisor assessing your finances is only that is required. Wealth management is concerned with wealth managers to frame a route map of preservation and accumulation of future wealth.

  • The existing source of wealth is not taken into account while preparing a financial plan. Wealth management need the existing account of your entire property, upon which capital investment of funds accumulation can be made.

If a person is aware of the risk, that may come up because of the lack of financial planning. He or she will definitely secure himself against the loss. Financial losses are easy to secure, however, sudden adversity such as, a critical illness or sudden death is what you need to take care.

A happier financial life be like

If you have surplus fund and have secured your risks, start investing money accordingly. Allocate fixed amount into your risk profile, plan your taxes well to prevent any leakage in your wealth, maximize retention and keep an account of what you have spent. Monitor your finance with basic learning and being aware of market.

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