We see the terms wealth management and financial planning being used a lot today. The finance industry, social media, and magazines use these terms almost interchangeably.  For example, we are AAFMAA Wealth Management & Trust and we offer financial planning. What is the difference?

Let’s start with financial planning, this is really the foundation of your financial picture. When you have a startup company, your foundation might be a business plan. In the military, when you organize a mission you start with objectives and plan the execution to achieve them, while considering the impact and possible factors that could change the execution or outcome. In civilian life, we often handle projects. These projects probably start with a plan that has goals and timelines. Financial planning uses our skills in handling projects, tasks, and missions and focuses them on your personal financial life to help reach certain financial goals.  

A financial plan helps define unique goals and objectives and helps create a strategy on how to accomplish those goals. With a comprehensive evaluation of a person’s financial goals and financial state, and by using currently known variables, projections, generated by a financial plan, can illustrate the future financial state. These variables can include cash flow – income versus expenses, asset values, withdrawal needs, net worth, tax liabilities, investment asset allocation, retirement plans, estate plans and more. While determining the current and future state of a person's financial situation, the plan also addresses steps that can be taken to change and increase the probability of success down the road.

When you are considering or making big changes in your life, a financial plan can help provide some guidance on the impact that change will have. If you are transitioning out of the military, what are some of the changes to expect? For example, your medical coverage, life insurance, savings, housing, and budget may change. Maybe you are thinking about changing jobs? There can be a number of impacts on your personal financial situation with a job change. You may need to consider a 401k rollover, deferred income, and again the possible changes with life insurance and medical coverages.

What does retirement look like for you? Do you plan to work throughout retirement or maybe you plan to never work again? A person’s retirement plans are unique, so it’s important to consider some of the natural risks that can impact retirement. Will you need long-term care, will you need to purchase long-term care insurance or self-insure, and how will you protect and preserve your wealth?

Wealth Management can be considered the outcome of a well-executed financial plan. In a simplistic definition it is the management of wealth, which means a person needs wealth in order to need wealth management. Wealth can be a subjective. To one person it may be $1 million, and to another it may be $25 million. Everyone has a distinct perspective and handling their wealth is, therefore, a unique situation.   

Wealth Management is the consultative process of using investment strategies to help meet the needs and wants of clients by providing the appropriate financial tools and services. At AAFMAA Wealth Management & Trust, we serve as a fiduciary on every account. As a trust company, as an investment management organization, and as a wealth manager, we do no sell any products, we provide recommendations and a service to help clients find the right investments and develop the right strategies.

Wealth Management entails coordinating a team of experts to address the needs and wants of clients.  At AAFMAA Wealth Management & Trust we use our highly qualified and skilled relationship managers to accomplish this. These managers coordinate with our financial planners, account administrators, trust administrators, and portfolio managers. Our business is focused around our three core services — Investment Management, Financial Planning, and Trust Services. We have specialized teams inside the Wealth Management & Trust company that comprise our organization. AAFMAA Wealth Management & Trust employs Certified Financial Planners and Certified Trust & Financial Advisors. Additionally, our staff designations also include Chartered Financial Analysts and Certified Public Accountants. The relationship manager coordinates all of this experience and knowledge to develop the right solutions and recommendations for our clients.  

If you have any questions or concerns regarding your investment strategies, financial planning, estate planning requirements, or wealth management, please do not hesitate to reach out to a relationship manager. You can send an email to wealthmanagement@aafmaa.com and a relationship manager will respond immediately.