A wealth manager must possess some essential skills that include financial modelling, leveraged buyouts, economic and accounting skills, technical analysis and evaluation, acquisitions and mergers analysis, as well as corporate valuation and financing
What is the Difference Between Wealth Manager and Financial Advisor?
The terms ‘financial advisor’ and ‘wealth manager’ are often used interchangeably, and for a good reason too. Essentially, both professions entail similar kinds of responsibilities.
However, the difference is in the type of clientele they deal with. This article delves into everything there is to know regarding financial advisor vs wealth manager. Seeing as people looking for financial guidance and assistance need to understand how an advisor and a wealth manager differ.
What Does a Financial Advisor Do?
Financial advisors typically work with individuals, families, or organisations. Private bank officials are also financial advisors who work with accountants and analysts to manage and maximise their client's assets and investments. Financial planners or advisors are in charge of the following duties:
- Conducts economic and insurance-related research for clients.
- Handles their consumer's accounts and executes security-related trades on their behalf.
- Discusses financial goals with clients and devises money-making strategies.
- Generates investment reports and keeps consumers informed of economic changes.
- Re-evaluates financial tactics in order to achieve financial goals and mitigate losses.
- Educates consumers on economic risks, insurance-related issues, and taxation.
- Explains various financial jargon, concepts, choices, and services to clients.
Economic linguistics is often too complicated for a regular person to comprehend. As a result, financial advisors must effectively convey such information to consumers, so they have a complete and clear understanding.
What Does a Wealth Manager Do?
Wealth managers collaborate in tandem with their clients and offer a wide range of services according to their economic needs, demands, and requirements. A wealth manager's designation encompasses the following services:
- Philanthropic planning and gifting
- Investment and risk management
- Real estate planning and transaction
- Taxation services and management
- Legacy and financial planning
- Retirement planning and management
Wealth managers work in various financial sectors, such as banks, insurance, brokerage and equity firms.
What are the Differences Between a Wealth Manager and a Financial Advisor?
Typically assists the low to middle-class of society.
Typically assists ultra-high-net-worth clients.
Aids in lifestyle and financial planning.
Manages and proliferates the wealth of such individuals.
Fees and Payments
Do not require such exorbitant amounts of money to work with their clients.
Need a minimum asset worth multiple lakhs or crores to work with their clients.
A simpler, less frequent, and at times, indirect approach to solve their client’s economic issues.
More comprehensive, hands-on, and direct approach to their client's economic issues since they work with extremely wealthy clients.
Similarities Between a Wealth Manager and a Financial Advisor
Since wealth managers are basically a subset of financial advisors, there are bound to be similarities between them. Hence, here are a few similarities between these 2 professions:
- Both professions offer somewhat similar services requiring proficiency in analytical, mathematical, and interpersonal skills.
- Both counsellors are educated in finance and economics-related disciplines and credentials to enhance their credibility and reputation.
Which One to Choose from Financial Advisor or Wealth Manager?
One must consider their minimum asset requisite while hiring a financial advisor or a wealth manager. Since wealth managers mainly deal with millionaires, there may be better ways to go about it if you are not one. However, some wealth managers are not as selective and work with clients who may not be super rich. Therefore, it is the individual’s responsibility to do their due diligent research while hiring a financial guide.
All financial planners, advisors, along with wealth managers set minimum requirements on their own accord. Meaning, how much a client has to pay will vary depending on the personnel. Now that individuals have a better understanding of what financial advisor vs wealth manager entails, they can make better judgement calls while hiring one.
FAQs on Financial Advisors vs Wealth Managers
Financial professionals face numerous hurdles, such as economic and financial turndowns, geopolitical aspects, volatile markets, ever-updating rules and regulations, and the evolving technology and trends.
Not necessarily. Financial advising or planning can be a lucrative career choice. However, it does have a few drawbacks like the consistent need to fulfil evolving regulatory demands and dealing with high stress and pressure levels.
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