How to allocate family assets? You will understand after reading this article.

Planned investment and financial management can help individuals manage their wealth better, so can families. Generally speaking, family financial management involves a wider range and requires a larger amount of expenditure. To a certain extent, making family financial planning in advance can help families resist external risks and gain extra return on investment, which is very necessary for every family.

Effective family financial planning and asset allocation can avoid family financial crisis to some extent. Facing the pressure of mortgage and car loan, reasonable savings plan and liquidity arrangement are particularly important for families. In addition, investing in insurance products can provide life support when families encounter unexpected risks, such as accidental injuries, family members' critical illness insurance, family helper life insurance, etc. Although it doesn't feel effective at ordinary times, it can protect family life from being swallowed up by risks at critical moments.

Effective family financial planning and asset allocation can ensure the sustained growth of family wealth. Every family will face some necessary expenses in the future, such as children's education and parents' pension, which may require a lot of money in the future. By making a long-term and steady investment plan, families can get relatively stable returns in the future, thus achieving the purpose of maintaining and increasing the value of family assets.

The outbreak of the epidemic in 2020 made more families aware of the uncertainty of risks, and the importance of family financial planning and asset allocation was further highlighted. So for professional wealth management institutions or wealth management managers, how to help investors do a good job in family financial planning and asset allocation?

The allocation of family assets is usually adapted to the family life cycle and family risk tolerance.

1, family life cycle and financial goals

The core idea of life cycle theory is to set financial goals according to the characteristics of life stages. Families are at different stages of their life cycle, and their assets and liabilities will be very different, so should their financial needs and priorities. See the table below for details:

In different stages of family life cycle, assets and liabilities will be very different, and the needs and priorities of financial management will also be very different. Financial management needs to make a reasonable investment plan for customers on the basis of understanding their characteristics and real investment needs.

Family risk tolerance is often measured by income, family burden, asset status and other dimensions, and individual risk tolerance is usually quite different. For example, for a middle-aged person who has entered the society for a long time, if his career goes smoothly, he generally has a stable source of income, and at the same time he has accumulated a certain amount of family wealth and has a strong ability to resist risks; However, if this middle-aged man has raised a second child and his wife is a full-time wife, the health status of both parents is worrying. At the same time, because he is too old, he is likely to lose his job or encounter a bottleneck in the workplace, and he still has a high mortgage to pay. At this time, his risk tolerance is low.

Therefore, when making an asset allocation plan for customers, financial management must be based on the customer's family risk tolerance, so that the asset allocation plan can give customers a relaxed investment mentality, make it easier to stick to it for a long time, and avoid large-scale redemption behavior when customers encounter large market fluctuations. At the same time, the amount of investment funds should be kept within the family's affordability, and the selected investment portfolio should be able to ensure that the risks are reasonable and controllable.

Understand the main influencing factors of family asset allocation, so how to do family asset allocation? What principles and steps should be followed in the allocation of family assets?

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