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Wealth management is the most comprehensive form of financial planning, encompassing an entire strategic plan to manage an individual’s assets. This offering typically includes advice on multiple financial matters at once, such as retirement planning, investment management, financial planning, estate planning and more. While wealth management is typically associated with the more affluent, almost anyone can benefit from the service. You can use our free advisor matching tool to help you find a financial advisor who can provide wealth management services.
What Is Wealth Management?
Instead of focusing only on a specific type of advice, such as retirement planning, portfolio management or estate planning, wealth management rolls all of these important needs into one. A wealth manager can work with you during every step of your financial journey to make sure you’re prepared for what lies ahead.
If you’re searching for a wealth manager, you may find that their minimum relationship sizes are quite high. That’s because they usually work with affluent people and their families, who are also referred to as “high-net-worth individuals.” In turn, it’s not uncommon for a wealth management firm to ask for a minimum in the range of $1 million or more in investable assets.
In addition to the aforementioned financial requirements that are needed to gain access to wealth management, you’ll need to be transparent with your advisor about all of your money and financial goals. In many cases, this means giving them the ability to make investment decisions on your behalf, though some advisors offer non-discretionary management.
What Services Are Part of Wealth Management?
As noted, wealth management is a comprehensive advisory offering that covers a wide range of services. Each of these services is designed to hit on a specific area of your finances. At the same time, though, they are all built to work together towards your ultimate objectives.
Services that may be part of your client-wealth manager relationship include:
- Retirement planning
- Estate planning
- Investment management
- General consulting
- Tax planning
- Business succession planning
- Education funding planning
- Debt consolidation and management
- Liquidity planning
- Family office services
Wealth management also gives you access to a dedicated wealth planner who can guide you through any financial issues you may need advice on. Having this level of close support could be incredibly helpful, as they’ll be extremely familiar with your overall financial situation. In addition, this consolidates your services at a single firm, making it easier to view your finances holistically.
How Much Does Wealth Management Cost?
Wealth management costs vary based on the services provided and the fee structures employed by advisors. A common model is the assets under management (AUM) fee, where advisors charge a percentage of the client’s investable assets. The average management fees for financial advisors in 2023 ranged from 0.59% to 1.18%, depending on the amount of AUM, according to AdvisoryHQ.
However, wealth management services are typically more comprehensive than simple asset management. While it’s difficult to pin down an average wealth management fee, a 2023 report from Kitces provides some insight into how much advisors who pair asset management and financial planning charge for their services.
According to the Kitces report, advisors who bundle the cost of a financial plan with their existing AUM fee for portfolio management charge a median fee of 1% for clients with up to $1 million under management. The median bundled fee falls to 0.80% for portfolios worth up to $2 million; 0.61% for portfolios worth up to $5 million; and 0.50% for portfolios worth up to $10 million.
The Wealth Management Process
While every wealth management firm may have a slightly different process when managing clients’ needs, most follow a path that resembles the following:
- Gather data
- Determine the client’s objectives
- Analyze the client’s current situation
- Create and recommend a complete plan for the future
- Implement the plan
- Monitor the plan
As you’d expect, every wealth management relationship begins with gathering information about the client’s financial situation. This includes discerning their risk tolerance, income needs, time horizon, goals and other characteristics. This process can also involve looking at the client’s current loans, bank accounts, investments and more.
The more information a client can provide to their wealth manager, the better and more comprehensive the wealth management services will be. From here, advisors and wealth managers will devise a plan and work to implement it. These plans often include both long- and short-term objectives.
Another key to the wealth management process is the fact that these relationships are typically ongoing. Given the comprehensive nature of wealth management services, wealth managers will consistently update the plans that they’ve created for you. By adjusting for changes in a client’s financial situation, advisors could help them make sure that they’re providing timely and effective advice.
When Do You Need a Wealth Manager vs. a Financial Advisor?
The terms wealth manager and financial advisor are often used interchangeably, but they describe different scopes of service. Understanding the distinction helps you identify which type of professional your situation actually calls for, rather than paying for more than you need or working with someone whose services do not fully address your complexity.
What a Financial Advisor Typically Covers
A financial advisor, including a certified financial planner, generally focuses on one or more specific areas of your financial life. That might mean investment management, retirement planning, tax planning, insurance review or estate planning guidance. Many financial advisors offer comprehensive planning that touches all of these areas, but they typically address each as a separate engagement or as part of a periodic review rather than as an integrated, continuously managed strategy.
A financial advisor relationship works well when your financial situation is relatively straightforward, your needs can be addressed within a defined planning scope and you do not require constant coordination across multiple complex financial dimensions. Someone who needs help building a retirement portfolio, managing 401(k) contributions and reviewing their insurance coverage is well served by a financial advisor without needing the full infrastructure of a wealth management relationship.
What a Wealth Manager Adds
A wealth manager provides everything a financial advisor offers, but integrates those services into a single continuously managed strategy rather than addressing them separately. The defining characteristic of wealth management is coordination. A wealth manager overseeing a client’s investments, tax strategy, estate plan and insurance coverage can adjust all of those simultaneously in response to a life change, a market event or a tax law shift, rather than treating each area in isolation.
That level of integration becomes genuinely valuable when your financial situation involves enough moving parts that optimizing one area without accounting for the others produces suboptimal results. A business owner approaching a sale needs investment planning, tax planning, estate planning and liquidity planning to work together in real time, not sequentially through separate advisors. A retiree with significant assets across taxable accounts, retirement accounts, a trust and an insurance portfolio needs withdrawal sequencing, RMD planning, estate coordination and tax management to be handled as a unified strategy rather than as independent decisions.
Wealth managers also typically provide access to investment opportunities, legal resources and specialist networks that standalone financial advisors do not maintain. Private equity allocations, direct real estate investments, estate planning attorneys on retainer and dedicated tax professionals working within the same firm are common features of a full wealth management relationship that a financial planning firm generally does not replicate.
Signals That Point Toward Wealth Management
Several specific circumstances suggest that a wealth management relationship is likely to produce more value than a traditional advisory arrangement.
A net worth above $1 million, particularly when that wealth is spread across multiple asset types including a business, real estate, investment accounts and retirement accounts, introduces enough coordination complexity that integrated management typically pays for itself through better tax outcomes and fewer costly oversights.
A business ownership interest adds succession planning, key person risk, business valuation and exit strategy to the financial picture in ways that extend well beyond what most financial advisors are equipped to address comprehensively. A wealth manager with experience serving business owners can coordinate the business and personal financial dimensions together rather than treating them as separate problems.
Multigenerational wealth transfer goals, particularly when they involve trusts, family governance structures or charitable foundations, require the kind of ongoing legal and tax coordination that a wealth management firm with in-house or closely affiliated specialists provides more effectively than a standalone advisor working from the outside.
A recent major liquidity event, such as a business sale, an inheritance, an IPO or a large equity compensation payout, creates an immediate need for coordinated investment, tax and estate planning that is difficult to address sequentially. The decisions made in the months following a significant liquidity event have long-term consequences, and having a team that can work on all dimensions simultaneously reduces the risk of a costly mistake in any one area.
Signals That Point Toward a Financial Advisor
If your financial situation does not involve that level of complexity, a financial advisor or certified financial planner is likely to cover your actual needs at a lower cost. Someone who is building wealth through regular contributions to retirement and investment accounts, managing a straightforward tax situation and working toward defined goals like retirement or college funding does not need the infrastructure of a wealth management firm to achieve good outcomes.
The higher fees associated with wealth management are justified when the coordination and access they provide produce measurably better results than a less comprehensive arrangement would. When your situation is not complex enough to generate that differential, the additional cost can reduce your long-term wealth.
Finding a Wealth Manager
There is not a standard certification that is provided in order for someone to offer wealth management services but all advisors should either be registered or certified. Many wealth managers are registered as investment advisors, but you can also work with a certified financial planner (CFP) who can provide similar services. CFPs are held to a fiduciary standard because of the rigorous certification that they all must go through.
Determining how your wealth manager is paid is important to figure out if they are a good fit for you. It’s typically a good idea to find an advisor who is not only certified but works as a fee-only fiduciary. This means that they are paid directly by you, and not by any potential products that they may recommend to you. As a fiduciary they are, instead, legally obligated to put your needs first.
As you can see, it’s not an easy task to find the right financial advisor for your situation, but it also shouldn’t be hard. That’s why we’ve developed a tool that will match you with financial advisors in your area that can be a good fit for what you’re looking for.
Alternatives to Wealth Management
Wealth management is designed for financial situations that require integrated, ongoing coordination across multiple planning dimensions. If your situation does not rise to that level of complexity, or if the minimum relationship size puts wealth management out of reach, there are alternatives that can still address your planning needs effectively.
A standalone financial planning relationship with a CFP® professional covers most of what a wealth manager provides but on a more targeted basis. Rather than integrating all services under one continuously managed strategy, a CFP® professional typically addresses specific planning needs as they arise, whether that is retirement projections, investment allocation, tax planning or estate review. For someone whose financial situation is relatively straightforward, this approach captures the most important benefits of professional guidance without the cost of a comprehensive wealth management relationship.
Robo-advisors offer a lower-cost alternative for investment management specifically. Platforms like Wealthfront and Vanguard Personal Advisor Services build and manage diversified portfolios based on your goals, timeline and risk tolerance, rebalancing automatically and in some cases incorporating basic tax strategies like tax-loss harvesting. What robo-advisors do not provide is the personalized, comprehensive planning that a wealth manager or CFP® professional brings to complex financial situations. Robo-advisors work best as a starting point for investors who are still building wealth and whose planning needs have not yet outgrown an automated solution.
Bottom Line
Wealth management brings together financial planning and investment management under one roof, making it a comprehensive option for those who want a professional to handle multiple aspects of their financial life simultaneously. Unlike narrower services that focus on a single area, wealth management is designed to account for your full financial picture, from taxes and estate planning to investment strategy and beyond. For those who need help with only one specific aspect of their finances, a financial planner or investment advisor may be a more affordable starting point.
The distinction between wealth management and other financial services comes down to scope and integration: “Wealth management is best explained as a combination between traditional financial planning and investment management. If you’re interested in having a professional manage your investments on your behalf while taking your larger financial situation into consideration, you’re probably looking for a wealth manager. To ensure you’re getting the highest standard of care, look for a wealth manager with at least a CFP certification and possibly additional licenses such as the Certified Private Wealth Advisor Certification,” said Tanza Loudenback, CFP®.
Tanza Loudenback, CFP®, provided the quote used in this article. Please note that Tanza is not a participant in SmartAsset AMP, is not an employee of SmartAsset and has been compensated. The opinion voiced in the quote is for general information only and is not intended to provide specific advice or recommendations.
Tips for Finding a Wealth Manager
- A wealth manager or financial advisor can be instrumental in helping guide you though your financial journey. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with 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.
- Once you narrow your search for a wealth manager down, you’ll need to decide whether they’re right for you. Consider using SmartAsset’s guide to questions to ask a financial advisor during the interview process.
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