Goals-based Wealth Management: Benefits of a Holistic Approach

A goals-based approach to wealth management can help you navigate the complex, lifelong financial planning process. In fact, it could serve you better than a traditional, siloed approach. Let’s look at what can go wrong with a disjointed numbers-based approach and explore the benefits of comprehensive, holistic financial planning.

A traditional numbers-based approach: Common pitfalls

Many people tackle financial planning by focusing on the numbers: What is my target rate of return? How much insurance do I need? Can I afford a bigger house? How much money do I need to save for retirement?

To support their pursuit of the “right numbers,” people often use separate advisors—for instance, a banker, a financial planner, an insurance agent, a tax professional, and an estate planning attorney—to oversee the various components of their household wealth. But can too many cooks spoil the broth?

This “siloed” approach to financial planning can easily lead to redundant investment strategies that could create exposure to unnecessary levels of risk. It may also result in multiple, random investment accounts in need of consolidation. Furthermore, such an approach may inadvertently overlook crucial tools, leaving entire planning areas to chance.

Goals-based wealth management: A better approach

By looking at financial planning through the lens of goals and objectives, individuals can create a foundation for sound decision-making and effective planning. An integrated approach to wealth management is based on identifying goals in several key categories, including career, lifestyle, family, health care, and leisure. Your specific goals, for example, may include buying a home, paying for a child’s education, philanthropic giving, or leaving a meaningful legacy for your family.

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Comprehensive wealth management helps you build the life you desire by working toward your goals. A holistic goals-based approach considers assets, markets, expenses and liabilities, time horizons and income requirements to come up with a custom strategy designed to achieve your objectives. Goals-based strategies encompass much more than just an investment plan. And because of their fuller, integrated nature, they can maximize your chances of reaching your goals.

Holistic financial planning and the role of life circumstances

When viewing their financial goals—such as buying a home, paying for a child’s education, or saving for retirement—individuals typically think in terms of what those goals cost rather than how achieving them might affect their lives. They may achieve better outcomes if they reevaluate the planning process, assess their current life issues, and review future aspirations prior to investment selection. Perhaps equally important, by putting life circumstances at the center of financial decision making, individuals may find more meaning in their actions with regard to money.

Indeed, values have a significant role to play in determining how individuals manage their assets. This is one way in which a holistic approach to “financial life planning” enables individuals to better assess their wants and needs, establish meaningful priorities, and avoid misguided investments.

When life circumstances and priorities change—as they inevitably will—so too will financial goals. Only those individuals who employ a holistic approach to planning can easily identify and address those areas of their financial lives that are still working well and those that may be hindering their financial well-being.

A key component of goals-based wealth management: Partnering with a single advisor

Crafting a plan that reflects your unique situation and ties your life aspirations to your financial goals is part art and part science. To achieve this level of planning you need to rely on the guidance of a single skilled advisor—someone who will take the time to get to know you and your circumstances and who will put together an appropriate combination of vehicles, strategies, and (where appropriate) additional planning professionals to help achieve your goals—whatever they may be.

Stay tuned to our blog for more insights and visit our Investment Essentials program for additional financial planning and educational resources.


PUBLISHED: January 2nd, 2019
4 Min Read

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