Wealth Management Advisor

What is a Wealth Management Advisor?

Wealth Management and Financial Planning are often a confusing set of words because the difference is unclear. Often, there is a perception that a Wealth Advisor is just a fancy word for Financial Planner that makes the Advisor seem more upscale. While there is no strict definition for what a Wealth Manager is versus what a Financial Planner is, the truth is that there is, in fact, a great deal of overlap between the roles and what services each provides.

Wealth Management Advisor

Wealth Management and Financial Planning

Wealth Management and Financial Planning are the most self-empowering topics that you can learn about today. Whether you are pursuing a career in investment banking, commercial banking, capital markets, or any industry, everyone should prioritize being their own finance professional as early as possible.

Being knowledgeable and educated about managing your financial well-being is arguably one of the most important skills in your adult life. The saying “knowledge is power” cannot be more relevant when it comes to personal finance.

Wealth Management Advisor vs. Financial Planner

Think of Wealth Management and Financial Planning as lying on a spectrum of personal financial advisory services. Why? Because while both Wealth Managers and Financial Planners ultimately give personal financial advisory services, each comes with its own demographic that they work with. Below is a list of commonly defined tiers of clients based on investable assets; typically, a Financial Planner will deal with just Mass Affluent.

  • Mass Affluent: $100,000 to under $1 million
  • High Net Worth (HNW): $1 million to $10 million
  • Ultra-High Net Worth (UHNW): $10 million and greater

Each tier is not set arbitrarily; the above brackets are guided by the general amount of investable assets a client would need to participate in certain investment products.

For example, suppose a client holds $6 million of investable assets. In that case, an Advisor is unlikely to present the client with an opportunity to invest in a private equity fund that requires a minimum of $5 million to be locked up for a 5-year period.

It creates the need for Advisors to focus on a segment of the client population and develop specialized expertise on investment products available to them. In this way, you can even think of a Wealth Manager as a type of Financial Advisor and treat the entire practice as general Financial Planning. And this gives us enough context to be able to answer our question: what is the difference between a Wealth Management Advisor and Financial Planner?

Wealth Managers will also provide a broader range of services and have a wider variety of investment products available – they will have a larger “shelf” of products to offer. Their clientele will be comfortably in the High Net Worth and Ultra-High Net Worth thresholds, and as a result, they will already have the basic financial goals of education planning and tax planning achieved.

Wealth Manager’s clients may require extensive tax planning and succession and estate planning, and it will require the Advisor to take a much more proactive role in their client’s wealth management. In such a way, a Wealth Manager may even end up being a touch point for the client’s attorneys, business managers, and accountants, which is something a typical Financial Planner would not typically do.

The above example illustrates how a Wealth Manager is much more involved in their client’s finances than a Financial Planner. In most cases, a Financial Planner may meet with the clients once or twice a year, but it would not be unusual for a Wealth Manager may be in touch every month.

Additional Resources

Thank you for reading CFI’s guide to Financial Planning vs Wealth Management. To keep advancing your career, the additional CFI resources below will be useful:

0 search results for ‘