Course Details

Strategic Financial Planning and Wealth Management
1.0 CR
Yes (may vary by section)

This course is a hands-on, problem-solving-based introduction to the questions, concepts, analytical tools, and financial instruments useful for financial planning. We teach financial planning from the perspective of the life-cycle model of consumption, where individuals wish to smooth consumption over their lifetimes, while at the same time achieve a set of financial goals. From this perspective, we address the most pressing questions any financial plan will face. The first question is how do individual preferences impact the optimal level of consumption and savings over the lifecycle. This leads naturally to an understanding of "rules-of-thumb" regarding any individual's progress towards successful implementation of a financial plan and in particular, whether an individual's savings are consistent with the individual's goals. The second question is whether an individual has identified, measured, and managed the risks faced by all financial plans. This provides guidance on what risks one should bear and which risks should be hedged or insured against. The third question is whether the wealth one amasses will be sufficient to accomplish one's long-term goals. We address this in an environment where not only are investment rates of return random, but so too are the lengths of realized planning horizons (lifetimes). The fourth question is how particular financial instruments (e.g. annuities, insurance, reverse mortgages) can be used to address the uncertainty surrounding planning horizons. Finally, we identify the common "pitfalls" observed in financial planning as well as the practical challenges to getting help with achieving one's financial goals. The course is designed for students with or without a financial industry background, who may be interested in pursuing careers in wealth management, or who simply wish to gain appreciation for the real-world practical difficulties one faces in accomplishing one's lifetime financial goals.

Asset Management Pathway
Finance Major
May be taken concurrently:
All Students: FINC-450-0