Your total wealth is a combination of various assets that you hold in different forms such as cash, bank deposits, gold, real estate etc. Wealth Management is all about managing those assets. Financial Planning should be the basis for managing your wealth. Financial Planning is unique for each individual. It takes into consideration planning of your savings, investments, financial protection, tax, credits, etc. Based on Financial Planning, a portfolio is created and the portfolio is managed on an ongoing basis.

The whole purpose of doing this is to have a sound financial health and to achieve financial freedom!

Earning money... well u know how to do it. But, for managing your money in a very efficient manner, you need to have an awareness of various financial instruments and you may need services from various financial institutions like banks, insurance companies and asset management companies. But, in a complex financial system, learning about the entire financial products, dealing with various financial institutions and financial markets may be difficult and time consuming for a person who is occupied in another profession. However, developing a basic financial awareness is something which you shouldn't avoid altogether. Once you develop the necessary financial awareness, the next thing is to have a good Personal Financial Advisor cum Service Provider. Financial Service Providers are part of the financial system who are authorised and regulated by the concerned Government apex bodies and who are authorised to provide genuine and timely service for people in connection with managing their money. So, choosing the right service provider is an equally important thing as developing basic financial awareness.

For managing your wealth efficiently, Financial Planning is the first step. This will give you clarity on how to achieve your financial goals - whether short term goals, medium term goals or long term goals. Financial Planning will also give you guidelines on what not to do or what should be avoided.

Second step is the implementation of your financial plan by using various financial instruments and methods. In this stage, a portfolio is created.

Third step is periodic review of your plan, review of your portfolio and taking necessary actions for improvement. If there are additions of new plans or changes in the existing plans, those are considered and therefore some additions or changes in portfolio may be incorporated accordingly.

To manage your wealth in an ideal manner, you should take into account the essential considerations like asset allocation, asset protection, asset accumulation, income generation from assets and transfer of assets to legal heirs as and when required. These are further explained in the following sections.

1. Asset Allocation

Asset allocation is based on the principle that different assets perform differently in different market and economic conditions. Different asset classes offer returns that are not perfectly correlated. Hence diversification reduces the overall risk. Asset allocation is one of the most important decisions that investors make. In other words, your selection of individual securities is secondary to the way you allocate your investment in realty, stocks, bonds, and cash equivalents, which will be the principal determinant of your investment results.

2. Asset Protection

Apart from the overall risk reduction that automatically happens with asset allocation, there are specific risk management methods to deal with financial uncertainties. We call it, Insurance.

Insurance transfers the financial risk of some of life's events to an insurance company. A sound insurance strategy can help protect your family from the financial consequences of those events. There are various financial risks which can be managed with the help of an apt insurance plan.

Buying a term insurance plan is like buying yourself peace of mind. A term insurance plan assures that the cover amount will take care of the family’s financial obligations and their daily needs, in absence of the chief breadwinner. It should be the foundation while building a financial roadmap. Being extremely affordable, the risk-reward for term insurance plans is fabulous.

Health Insurance or Medical Insurance is another important financial protection plan that one should never avoid. Critical illness cover can also be added to enhance one's protection and this is becoming more relevant in today's society which has changing lifestyles and hence are more prone to critical illnesses.

3. Asset Accumulation

For accumulating wealth, investor behaviour is as important as choosing the right investments and diversifying your portfolio.

Here are some preferred investment options in India.

Mutual Funds: Mutual Fund is a pool of money from numerous investors who wish to save money or enhance money. Each fund's investments are chosen and monitored by qualified professionals who use this money to create a portfolio. That portfolio could consist of stocks, bonds, money market instruments or a combination of those. As an investor, you own shares of the mutual fund, not the individual securities.

Investing in a mutual fund can be a lot easier than buying and selling individual stocks and bonds on your own. Investors can sell their shares when they want. Mutual funds permit you to invest small amounts of money, however much you would like. All shareholders share in the fund's gains and losses on an equal basis, proportionately to the amount they've invested. By investing in mutual funds, you could diversify your portfolio across a large number of securities so as to minimise risk. By spreading your money over numerous securities, which is what a mutual fund does, you need not worry about the fluctuation of the individual securities in the fund's portfolio.

Mutual funds are normally classified by their principal investments, as described in the investment objective disclosed in Offer Documents. The main categories of funds are money market funds, bond or fixed income funds, stock or equity funds, and hybrid funds. Within these categories, funds may be sub-classified by investment approach or specific focus. Apart from these, there are a few other popular mutual funds such as Gold Funds, Real Estate Funds, Infrastructure Funds, International Funds, Arbitrage Funds, Sector Funds and ELSS Funds.

PMS (Portfolio Management Service): PMS is a SEBI licensed investment platform for investing in stocks, fixed income, cash, structured products and other individual securities, managed by a professional money manager, which can potentially be tailored to meet specific investment objectives. Every PMS account may be unique though a portfolio manager may run several portfolios simultaneously.

4. Income from Assets

Retirement planning is a significant part of the wealth management process. There are many fears that people commonly have. Some of these are

A sound approach to retirement planning involves taking a close look at your potential retirement income sources and creating a customized financial plan to help meet your unique retirement goals.

5. Transfer of Assets

Transferring assets to Nominee or Legal Heirs may involve several documentary requirements to be fulfilled, and more so in the absence of a proper WILL or Nomination. It is easier to handle such things with an expert's help and guidance. Effective estate planning enables you to control the distribution of your wealth after death. Your estate plan should spell out your healthcare wishes to help ensure that they are carried out. It can even designate someone to manage your financial matters should you become unable to do so.