What is Personalized Wealth Management?
Philippine Investment - Filipino individuals, cooperatives, and institutions.
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According to The Wealth Report 2022 report presented by Knight Frank, the Philippines has 18,273 high net worth individuals (HNWI) or those with net worth over $1 million (around ₱59 million) as defined by the London-based real estate consultant. This number could shoot up to 32,685 HWNIs or around 79% increase by 2026.
There is no question on the capability of Filipinos in increasing their net worth. However, as we gain more wealth, the more complex the situations we are exposed to. These situations are unique to each one of us, therefore the financial plan you ought to follow should also be well-suited for you.
Personalized wealth management is a tailor-fit, extensive approach to financial planning. It comprises different areas such as investment portfolio management, retirement planning, tax planning, and estate planning.
1. Investment portfolio management
You require a more complex investment strategy than those with lower net worth individuals. You also have a wider choice of investment options. This will be addressed by implementing a systematic and technical investment strategy that will make your decision-making easier. As time goes by, you may need to review your strategy to make sure it is still in line with your goals.
A type of investment management called “Discretionary Investment Management” allows you to delegate the task of making financial decisions on your behalf. This can be beneficial for you especially when you are exposed to a fast-changing financial market where an immediate decision is required.
Another type of investment management is “Directional Investment Management” where you can be more involved in managing your portfolio, while also having the benefit of receiving expert advice from your wealth manager. You will have the final say in what goes on inside your investment portfolio.
2. Retirement planning
No matter how good the returns from your investments are, there are still factors beyond your control that are important to take note of such as rising inflation and increasing cost of living. Another important factor is your life expectancy. Having a good retirement plan incorporates all of these considerations to determine how much you should save up, how much income is required, and how much you can spend on retirement. You want to make sure your savings and investments can cover your living expenses once you retire. Your pension alone might not be able to sustain your spending, so you should explore additional income streams.
3. Tax planning
As your wealth accumulates, your tax payable also increases. Chances are, you may be paying more than you need to. In addition to that, the tax system here in our country is also revised from time to time. With the proper tax strategy that is apt for your situation, you will also be made aware of potential tax benefits and tax-saving investments you can consider lessening your tax burden.
4. Estate planning
Once you pass away, estate planning makes sure that all of the wealth you have created when you were alive be protected, continues to provide for your family, and is passed smoothly to the people you want to receive them. It can save your heirs the inconveniences when that time finally comes. A continual review of your estate plan is also required especially when you reach certain points in your life, (e.g., getting married, having children, family separation). The more intricate your personal and financial circumstances are, the more foolproof your estate plan should be.
You may be concerned about the daunting process of protecting and growing your wealth. You would rather focus on enjoying other important things in life such as spending time with your family or pursuing new hobbies. After all, a great portion of your life is spent working and accumulating what you have now then might as well reap the benefits as long as you can.
The best time to start your plan is now. You can begin by talking to an individual wealth consultant nearest to you. You no longer need to do a lot of researching and studying on how to effectively manage your wealth as they will do that for you. They have an obligation to put your interests first above any other things. Lastly, we tend to get pressured when it comes to making big financial decisions, often it can cost us a huge amount of capital. This is where a good wealth consultant can help you weigh things out, as they will remind you that your financial plan is emotion-free when you formulated it together.
Disclaimer: Just a reminder, dear reader, that the content in this column is my opinion only and should not be construed as investment advice because I am not your financial adviser, neither did I take into consideration your personal objectives, financial situation, needs or circumstances as your fiduciary. This column is mainly for your entertainment and education only.