November 14, 2016
Goals Based Wealth Management can help investors tie financial decisions to personal and family objectives.
For many investors, building a financial portfolio can feel like an abstract process. Without a concrete plan for what they want to do with returns or an understanding of when they will need to access funds, investors can find it difficult to understand their true appetite for risk — or whether their investments are meeting their needs.
To close this gap, many investors are embracing Goals Based Wealth Management, an investment philosophy that links wealth and financial decisions to specific life goals. “Individuals and families have a lot of aspirations for their lives, and their finances play a critical role in determining whether they achieve them,” says Jason Stamm, Central Region President of The Private Client Reserve of U.S. Bank in Minneapolis.
Goals Based Wealth Management makes the investment process more meaningful for clients because it links their investment decisions to what matters to them personally, says Amy Kane, Senior Wealth Planner for The Private Client Reserve in Denver. “They are not setting arbitrary dollar amounts. They are making plans to support their passions.”
Pick a Card
Wealth planners begin the Goals Based Wealth Management investment process by scheduling a discussion and then giving clients a deck of 10 cards categorized under three types of goals:
1. Lifestyle — how to live and fund daily life
2. Family — how to provide for an extended family
3. Impact — how to impact the community and the world
There are also three blank cards that give clients the opportunity to write their own unique goals tailored specifically to them.