When it comes to the management of your personal finances, tackling the task by yourself and forming a long-term plan that prepares you for a secure future can be a daunting task. For this reason, many people select to retain the professional services of firms offering advice and expert assistance, such as wealth managers and financial advisors. Before enlisting any help, it is important to ensure you are obtaining the right type of service to suit your individual needs. To this end, you might currently be wondering “what is the difference between a wealth manager and a financial advisor?”
In short, “financial advisor” is a broad term, whereas a wealth manager is a specific type of advisor who typically assists a certain kind of clientele – those who are affluent. However, you do not necessarily need to be wealthy to consider the assistance of a wealth manager, making their services useful even when you may not have much to invest.
In the following sections, we will explore wealth managers and financial advisors in greater detail and answer some common questions asked regarding these two professions and the services that they provide.
What service does a financial advisor offer?
An expert in their chosen field, a financial advisor is a professional who assists their client base with a broad selection of financial services. Typically, financial advisors will help with long and short-term financial planning, as well as investment management.
As briefly touched upon, “financial advisor” is a general term and does not refer to a single or specific sort of advisor. However, particular qualifications are a mandatory requirement for advisors to offer professional advice, as is following strict rules specific to their sector.
Certain advisors may specialise in working with particular kinds of clients, such as business owners, private individuals, artists in the entertainment industry or even athletes.
Essentially, financial advisors provide their clients with tailored advice on how best to manage their personal finances, and they typically offer a wealth of different services, such as estate planning, tax planning and investment management.
Usually, a financial advisor will begin by fully understanding their client’s present financial situation by carrying out an in-depth survey containing questions designed to assess their current circumstances and future goals, as well as their attitude towards risks. Based on the information gleaned from their client’s answers, they can then recommend certain financial products they deem appropriate for their individual circumstances.
Financial advisors can also work alongside their clientele to determine both short and long-term aims, helping to design a realistic plan that makes these goals attainable. These ambitions may include, but are in no way limited to, purchasing a property, making payments for private education, retiring early, generating income, reducing any tax liabilities or donating funds to charity organisations.
What does a wealth manager offer?
Wealth managers are technically a subset, or particular type of financial advisor. The key factor that often sets wealth management services apart from other options offering financial advice is the type of clientele they assist. Typically, wealth managers will predominantly serve individuals who command a high-net worth, and as their title implies, they will usually manage the assets that comprise this wealth for such clients.
Wealth managers will usually work closely alongside their clients, delivering a lengthy list of services that are combined in a single but comprehensive advisory offering. These services can include retirement planning, financial planning, investment managing, tax services, legal planning, estate planning and philanthropic planning, among others. The individual needs of a client are always the determining factor that decides which specialist services a professional wealth manager will deliver.
A number of independent financial advisory firms across the UK provide wealth management as an additional option to their suite of services. Furthermore, wealth management services are also supplied by banks and large financial institutions, although these options are typically for the exceptionally wealthy, for those with more modest assets, firms that specialise in wealth management are a more suitable option.
Is there any difference between a financial advisor and a wealth manager?
Some financial advisors will use the title “wealth manager” and “financial advisor” interchangeably. However, by definition, wealth managers deliver a holistic approach when it comes to financial planning.
A financial advisor might only offer investment advice, while a professional wealth manager can provide a comprehensive service that considers all aspects of an individual’s financial circumstances, and they may work in conjunction with third parties that can offer legal services like will writing or giving advice on a mortgage’s suitability.
Do you need financial advice and wealth management services?
For many people, a financial advisor or wealth manager may seem like an extra expense, but it may well save you money in the long-term. Sound professional financial advice and effective wealth management can often help individuals achieve their long-term goals faster and mitigate unnecessary tax payments that can be easily avoided with expert assistance and specialist strategies.
Assessing how and where to invest can be a complicated process unassisted, but with financial advice and professional wealth managements services enlisted, you can avoid selecting unsuitable products, avoid the pitfalls that may have important tax implications and fully understand any risks involved.
If you have modest assets and are currently looking for assistance with one key area of your finances, whether it is investments or estate planning, a financial advisor may be an option to consider. However, if you are seeking a more comprehensive package that considers all areas of your financial circumstances, selecting a wealth manager to take an unbiased view of your personal finances and make professional recommendations may be more suitable.
Professional wealth management and financial advice at your fingertips
If you’re confused by the question “what is the difference between a wealth manager and a financial advisor?” and you are seeking help with investments and financial advice in Chester, we can help. Our experienced team at Hartey Wealth Management can not only offer guidance on all areas of your personal finance, but we can also create a dedicated investment portfolio and financial strategy that reflects your individual needs. Contact us today for independent advice.