Financial Planner vs. Investment Adviser vs. Wealth Manager

There are many financial professionals out there in various areas of specialization dedicated to helping clients manage their money. Accountants, financial planners, investment advisors and stockbrokers may all fit the bill, depending a client’s needs.

Here we will take a look at the differences between a few financial professions – financial planners, investment advisors and wealth managers.

Financial Planner – A financial planner will help clients develop a plan encompassing all areas of finances, including savings, taxes, retirement, inheritance and college funds, in addition to helping clients work out how they can achieve their financial aims. When it comes to selecting a financial planner, clients often make the choice between those that charge a percentage for all assets under management, versus those that charge a fee for their advice – fee versus commission based.

Investment Advisor – An investment adviser usually concentrates on long term investment strategies for wealthy individuals and couples. They deal in all kinds of securities and have a fiduciary responsibility to see to it investments are appropriate for each individual client.

Wealth Manager – Wealth managers help those individuals with a large amount of income and assets with estate planning, risk management, and capital gains planning. Private wealth managers are usually close to their clients and act as a custodian of their money. Having a lot of money is not easy to manage efficiently, and a wealth manager will help to ensure it is managed in the most efficient way possible.

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Though there are some noteworthy distinctions, there is also considerable overlap between these roles. In fact, financial planners and investment advisors can both be licensed as investment advisors so as to be able to recommend securities to their clients.

Clients all seem to agree that the number one consideration should be that financial professionals are trustworthy and have the skills and core competencies necessary to achieve the desired result.