Wise Wealth Planning: Just as important as your return

We often hear or have read the popular quote, “A goal without a plan is just a wish.”

It is an apt quote to keep in mind for managing your wealth.

Wealth planning is a comprehensive approach to managing financial resources that focuses on accumulation, preservation, and transfer of wealth. It involves strategizing various aspects of personal and family finance that includes investment management, risk mitigation, and planning for taxes, estate, and even retirement.

Why plan your wealth?

It provides a structured path to financial stability and prosperity that will allow you to confidently fulfill your aspirations for yourself, your loved ones, and for other people who matter to you – so all of them can continue living well in the future.

Without a plan to execute, you, and even your family members, may be burdened by risks such as unexpected big expenses, inaccessibility of assets, and piles of tax liabilities to pay.

Kickstart your plan: Divide and conquer.

Wealth planning is a holistic approach to growth and legacy. This process involves developing a strategic plan that encompasses various elements to ensure a thorough and effective management of your financial assets, resources, and legacy. To give you a head start, your main wealth plan should be classified into different sub-plans that cover:

1. Personal finance
2. Health
3. Retirement
4. Estate or legacy
5. Taxes
6. Charity or giving back

You can add to this list or take out others depending on your objectives. However, keep it manageable so it won’t overwhelm you.

The right financial solution for every plan

Seems complicated? No, it’s just simply organizing and clarifying your intentions for you to know what financial tools would be suitable to help you achieve your goals, and, ultimately, your overall wealth plan.

For personal finance and investments, bank products such as time deposits typically let your money grow on your own terms with reliable growth through high interest, flexible terms, and renewable options. These are safe and secure as deposit products are insured by Philippine Deposit Insurance Corporation (PDIC) up to PHP 500,000 per depositor.

Banks also offer financial instruments such as Unit Investment Trust Funds or UITFs that are managed by asset management professionals who will make the most out of your invested money.

As an investment vehicle, you should know your risk profile and time horizon by taking a suitability assessment. This ensures that the investment matches your capacity and ability to take risks. While UITFs aim to grow in value, they also come with risks of decline in times of negative market conditions. Unlike deposits, these investments are not insured.

For plans that involve managing risks such as health, retirement, estate management, and charity, life insurance products are suitable solutions to consider.

A key feature of life insurance is its guaranteed death benefit or the cash proceeds given to the beneficiaries at the time of demise of the policyholder or the insured person. The death benefit feature and its coverage period vary depending on the type of life insurance availed.

If your primary objective is to cover for estate taxes, unexpected expenses, and wealth transfer to heirs, suitable life insurance policies that you can consider are:

1. Whole life insurance offering lifetime protection and accumulation of cash value; or
2. Investment-linked insurance bundling the benefits of insurance coverage and potential growth of account value depending on the performance of the fund selected.

Tapping a partner for your wealth plan

Seeking a reliable and expert professional is critical in wealth planning. If you wish to avoid pitfalls and mishaps in managing your wealth, seeking sound advice is the most prudent thing to do.

With the help of your trusted bank partners and insurance financial advisors, you gain a better understanding of the available financial solutions and how these can support your efforts to reaching your wealth objectives.

For example, certain solutions that simultaneously address your needs for estate planning, wealth transfer, and flexibility may be the most appropriate for you. In that case, your financial advisor can help you decide and execute a plan.

Remember, a goal needs a plan if the intent is to achieve it. Now you know the next step to take.

If you wish to know more about solutions for wealth planning, you can explore AXA Asset Master or consult your relationship manager or investment specialist.

(AXA Disclaimer: AXA products mentioned here are not deposit products. Earnings are not assured and principal amount invested is exposed to risk of loss depending on market conditions. This product cannot be sold to you unless its benefits and risks have been thoroughly explained. If you do not fully understand this product and cannot tolerate possible substantial loss of investment value in order to achieve your financial objective, do not purchase or invest in it. Actual terms and conditions are found in the policy contract. In case of conflict, the policy’s terms and conditions will prevail. This financial product of AXA Philippines is not insured by the Philippine Deposit Insurance Corporation and not guaranteed by Metrobank.)

(Metrobank Disclaimer: This is general investment information only and does not constitute an offer or guarantee, with all investment decisions made at your own risk. The bank takes no responsibility for any potential losses.)

MARK ANTHONY VALINO is the Head for Single Premium and Unit-Linked Category of AXA Philippines. He is a champion of financial education and inclusion with over 20 years of experience in the local capital market and insurance industries. He earned his undergraduate degree in Bachelor of Science in Commerce, Major in Economics, from the University of Santo Tomas. He is also a holder of a master’s degree in Business Administration (MBA) from Ateneo de Manila University Graduate School of Business and MBA with specialization in Capital Markets from the Lyceum of the Philippines University and The Philippine Stock Exchange, Inc. He is currently a member of the National Advisory Council (Philippines) of Chartered Institute for Securities and Investment, a London-based global professional body and educational charity.