Wealth Manager vs. Financial Advisor

A wealth manager and a financial advisor both offer guidance to individuals looking to grow and manage their finances, but the roles differ in scope and specialization. While financial advisors can provide advice on a range of financial matters – such as budgeting, retirement planning and investment choices – wealth managers typically focus on more affluent clients and may offer services like estate planning, tax optimization and legacy planning. Understanding the differences between a wealth manager vs. financial advisor can help individuals decide which type of professional best suits their financial goals and circumstances.

Need help finding a financial advisor? SmartAsset’s free tool can match you with up to three advisors who serve your area.

What Is a Financial Advisor?

A financial advisor is an expert who helps clients with a wide range of financial services. Advisors typically provide financial planning and investment management. In some instances, advisors might only offer one or the other, though.

However, the term “financial advisor” is broad and doesn’t refer to one specific type of advisor. For example, a certified public accountant (CPA) is someone who has earned a certification to work with taxes and accounting. Meanwhile, a chartered life underwriter (CLU) is an expert in the subjects of life insurance and estate planning. In addition, a Certified Financial Planner™ (CFP®) focuses on building clients’ financial plans for their future goals.

Some advisors also work with particular clients, such as retirees or business owners. You can get an idea of what specialties an advisor has by looking at his or her certifications and licenses. Learn more about common advisory certifications.

What Is a Wealth Manager?

Wealth managers are just a subset of financial advisors. The thing that sets them apart from other advisors is their clientele. Wealth managers primarily serve high-net-worth and ultra-high-net-worth individuals. And as the title implies, they usually manage large amounts of wealth for these clients.

Wealth managers work closely with their clients to offer a variety of services, rolled into one comprehensive, advisory package. Services include investment management, financial planning, tax services, retirement planning, legal planning, philanthropic planning and estate planning, among others. A client’s needs are the determining factor for which services a wealth manager will provide.

Many independent financial advisor firms offer wealth management in addition to their other services. You can also find wealth management services from banks and other big financial institutions. Some of the most prominent examples are Fisher Investments, Merrill Lynch, Edward Jones and J.P. Morgan.

The fees that you pay when you work with a wealth manager are similar to other financial advisor fees. Expect to pay a percentage of your assets under management (AUM). Many firms also charge additional fees for individual services or products. These other fees can come in hourly or fixed arrangements.

Financial Advisor vs. Wealth Manager

As mentioned above, the primary distinction lies in the types of clients each professional serves. Financial advisors tend to work with a broader range of individuals, from those beginning their financial planning journey to those planning for retirement. Wealth managers, by contrast, work almost exclusively with affluent clients who need specialized services that address the complexities associated with larger asset bases.

While both roles may overlap in providing investment advice, wealth managers typically offer additional services tailored to high-net-worth individuals. These can include managing intricate tax and estate planning issues, overseeing private investments and even lifestyle-related financial concerns like luxury purchases or private jet arrangements.

Financial advisors generally provide a more foundational level of guidance, often focused on helping clients save, invest and plan for major life events.

Do I Need a Wealth Manager or a Financial Advisor?

The kind of financial advisor you need depends on your individual situation. In general, you should consider a wealth manager if have a high net worth and want comprehensive management of your finances.

However, an important element to consider with a wealth manager or any other financial advisor, is the minimum asset requirement for opening an account. For example, some wealth management firms require a minimum of $1 million, $10 million or even more just to open an account.

Other financial advisory firms may be more focused on working with the “mass affluent” may not require any minimum investment or account size. What’s important is that you find an advisor or wealth manager who’s experienced and equipped to meet your unique needs, whether your ultra wealthy or just starting out on your financial journey.

If you mostly need a specific service, consider other specialized types of financial advisor. An advisor with a more general background, like a CFP®, could also be a good fit. This is especially true if you’re just getting started with investing and need help with your initial planning.

Those who are just starting to invest may also want to consider a robo-advisor. A robo-advisor uses software to manage your portfolio digitally. You often don’t have the ability to talk with a human advisor, but they make up for that with lower fees than traditional advisors.

Bottom Line

Financial advisors provide financial planning and investment management services for their clients. The term financial advisor is very general, though. One advisor may specialize in life insurance, while another focuses on estate planning.

A wealth manager is a specific type of financial advisor who typically works with high-net-worth individuals. The services of a wealth manager are very hands-on and comprehensive, so that a client can work with just one advisor for all of his or her financial needs. All financial advisors, including wealth managers, set their own minimum requirements. In other words, how much you’ll need in order to work with a certain advisor will vary.

Tips for Choosing a Financial Advisor

Whether you need help selecting investments or planning for retirement, a financial advisor can be a valuable resource to have in your corner. Finding the right financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
After you narrow down your search to a few advisors, you should contact them to see which is best for you. In addition to asking about their fees and account minimums, here are some questions to ask a financial advisor before you make a final decision.

Next Steps

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