The best wealth management strategies do more than preserve and grow capital assets; they also account for significant changes and events that can prevent investors from meeting their life and financial goals. Yet these risks are often given scant attention or left out altogether when advisors sit down with their clients to create a financial plan. This doesn’t necessarily mean that advisors or their clients are indifferent to the risks that can derail a wealth management strategy. In many cases, both parties may simply be too focused on the details of portfolio planning to examine the risks that lie along the path to financial success. There is also a general reluctance among most people to consider, let alone discuss, unpleasant events that could harm them or their loved ones. Who wants to entertain thoughts about a death in the family, or the possibility of becoming too sick to work?
The reality is, risk is an inevitable part of life and should be factored into every wealth management strategy. That’s why it’s important to undertake a risk management review as an integral part of financial planning.
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