Which Is Right For You?

Managing money is often a team effort. It’s important to get expert advice when deciding where to invest your money, how to grow and maintain your assets, and even how to manage your taxes as effectively as possible.

This is where professionals such as wealth managers and financial advisors come in. Although these terms are often used interchangeably to refer to professionals who handle customers’ money and provide financial advice, there are important differences between the two. Here’s what you need to know:

Wealth managers are financial professionals who almost exclusively advise high-net-worth individuals. This is perhaps the biggest difference between a wealth manager and a financial advisor.

Wealth managers can create financial plans that include estate planning, investment strategies, real estate, retirement, divorce, and more.

Some wealth managers require you to have a minimum amount of assets before they will take you on as a client. for example, charles schwab provides wealth advisory services with a minimum of $1 million.

fidelity We offer wealth management services with an eligibility requirement of at least $250,000 managed through Fidelity Wealth Services. However, if you require a personal wealth management team of financial professionals, you must have at least $2 million managed by Fidelity Wealth Services and at least $10 million in total investable assets.

As you can see, the minimum requirements are quite high, especially if you want a team working for you rather than one individual.

Most financial institutions also offer wealth management services in addition to other financial services, so you should check whether your current financial institution offers these services (and if you qualify). there is.

Wealth managers typically collect fees as a percentage of the assets they manage.

Financial advisors provide advice on a variety of topics, including retirement, tax planning, insurance, savings, and estate planning. Creating investment strategies and providing investment advice is one of the important services provided by financial advisors. Financial advisors are also licensed to handle and advise on certain types of securities.

Financial advisors tend to work with more economically diverse clients than wealth managers. However, some financial institutions may require a minimum amount to use their services, even if that minimum amount is much lower than what a typical wealth manager would require.

Fees to financial advisors can be collected as a percentage of assets under management or as commissions on in-house insurance and investment products. Another way some advisors charge fees is as a flat fee or hourly fee that takes no account of the assets under management.

Choosing a financial professional to help you achieve your goals is a very personal decision. Factors such as fee structure, investment and planning philosophy, and reputation are far more important factors than semi-arbitrary labels like “wealth manager” or “financial advisor.” ”

That being said, broadly speaking, a wealth manager may have the experience and expertise to help you if you’re a wealthy individual, while a financial advisor may offer superior service at a more affordable price. can.

If you don’t meet the minimum requirements for either profession, but would like some guidance about your financial situation and investment goals, you may also want to consider a robo-advisor.

Robo-advisors are a popular type of financial service because they collect information about your investment preferences, risk tolerance, goals, and time horizon and create portfolio recommendations that automatically adjust based on your needs and over time. is. improvement and wealth front Two strong candidates for robo-advice services.

Wealth managers and financial advisors sometimes seem to be used interchangeably, but wealth managers tend to work with more affluent clients. Even if you don’t have enough assets to work with a wealth manager or financial advisor, you can look for other types of services to help you reach your goals, such as robo-advisors.

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