Wealth Planning Guide 12 min read

Wealth Manager vs. Financial Advisor What's the Difference?

Understanding which professional is right for your financial journey - from building wealth to preserving multi-generational legacies

Drew Keever
Drew Keever
Co-founder, AdvisorFinder • Updated Nov 2025
Key Insights
01
Wealth Managers
Typically require $1M+ assets
02
Financial Advisors
Serve all wealth levels
03
Key Difference
Scope & complexity of services
Take the Quiz
Find your match →

The main difference between a wealth manager and a financial advisor lies in scope and typical clientele. While both help you navigate financial decisions, they serve different needs at different stages of your wealth journey. Understanding these distinctions isn't just academic - it directly impacts the quality of advice you'll receive and whether your financial professional can truly address your unique situation.

What matters most is finding someone who can address your specific financial needs, regardless of their title.

— AdvisorFinder Research Team

Wealth Managers

  • Work with high-net-worth individuals ($1M+ in investable assets)
  • Offer comprehensive financial services including investment management, estate planning, and tax strategy
  • Take a holistic approach to managing complex financial situations
  • Often coordinate with attorneys, CPAs, and other specialists

Financial Advisors

  • Serve clients at various wealth levels
  • May specialize in specific areas like retirement planning or investment management
  • Offer more focused or modular services
  • Often work with emerging affluent and middle-market clients
In-Depth Analysis

What Each Professional Actually Does

Understanding the day-to-day differences in how these professionals serve their clients

Portfolio
Tax
Estate
Legacy
360° Comprehensive Approach

What Does a Wealth Manager Actually Do?

Wealth managers provide comprehensive financial services for high-net-worth individuals and families. They act as a single point of contact coordinating all aspects of your financial life.

Core Services Include:

Investment Portfolio Management

Managing investments across multiple accounts including taxable, retirement, and trust accounts. This includes asset allocation, rebalancing, tax-loss harvesting, and coordinating with alternative investments like private equity or real estate.

Tax Planning & Optimization

Developing strategies to minimize tax burden through income timing, charitable giving, retirement distributions, and coordination with CPAs for complex situations like business sales or stock options.

Estate Planning Coordination

Working with estate attorneys to establish trusts, update beneficiaries, create wealth transfer strategies, and ensure your legacy wishes are properly documented and executed.

Real-World Example

A wealth manager might help a client who just sold their business by coordinating with tax attorneys to minimize capital gains, restructuring their investment portfolio for retirement income, updating their estate plan, and creating a charitable giving strategy - all as integrated parts of one comprehensive plan.

What Does a Financial Advisor Do?

Financial advisors help individuals and families make informed decisions about their money. Their services can be comprehensive or focused on specific areas depending on their specialization and your needs.

Common Services Include:

Retirement Planning

Creating strategies for retirement savings, optimizing 401(k) contributions, IRA rollovers, Social Security timing, and developing sustainable withdrawal strategies for retirement income.

Investment Management

Building and managing diversified portfolios tailored to your risk tolerance, time horizon, and goals. This includes selecting appropriate investments, monitoring performance, and making adjustments as needed.

Financial Goal Setting

Helping define and prioritize financial objectives, creating actionable plans to achieve them, and tracking progress over time. This includes education funding, home purchases, and other major life goals.

The scope varies significantly between advisors. Some offer holistic planning similar to wealth managers, while others specialize in specific areas like retirement planning or investment management.

Your Goals
Retirement
Investments
Education
Insurance
Debt
Savings
Wealth
Manager
OR
Financial
Advisor

Still Deciding Which Type You Need?

Don't worry about choosing between a wealth manager or financial advisor. Our assessment helps identify financial professionals based on your situation.

Free assessment No commitment Personalized results
Find Your Match
Interactive Assessment

Which Professional Is Right for You?

Answer a few questions to get personalized results (no email)

Question 1 of 6

What are your current investable assets?

Include retirement accounts, brokerage accounts, and savings (exclude home equity)

How complex is your financial situation?

Consider factors like business ownership, multiple properties, trusts, or complex tax situations

What services are most important to you?

Select your primary financial planning need

How involved do you want to be in financial decisions?

Consider your time, interest, and expertise

What's your time horizon for financial goals?

When do you need to achieve your primary financial objectives?

How do you prefer to pay for financial advice?

Different fee structures work better for different situations

Analyzing your responses...

Your Questions Answered

Common Questions & Misconceptions

Get clarity on the most important distinctions between wealth managers and financial advisors

Showing 15 questions

Common Misconceptions

01

The title tells you everything about what they do

Reality: Titles are largely unregulated. A "wealth manager" at one firm might offer the same services as a "financial advisor" at another. Focus on credentials, services offered, and client testimonials rather than job titles.

Key Takeaway: Look beyond the title to actual services and expertise
02

All financial advisors are fiduciaries

Reality: Only some advisors are legally required to act as fiduciaries (putting your interests first). CFP® professionals, RIAs (Registered Investment Advisors), and fee-only advisors typically operate under fiduciary standards. Broker-dealers may operate under a "suitability" standard.

Always Ask: "Are you a fiduciary, and will you act in my best interest at all times?"

03

Wealth managers only work with millionaires

Reality: While most have minimums, some work with clients below typical thresholds, especially if there's high income and wealth-building potential. Many firms offer different service tiers to accommodate various wealth levels.

04

More credentials automatically mean better advice

Reality: Credentials matter, but so do communication style, relevant experience, and whether the advisor understands your specific situation. The best advisor for you combines appropriate credentials with the right experience and approach.

05

I can't afford professional financial advice

Reality: Many financial advisors work with clients at all wealth levels. Fee structures vary widely, and even one planning session can provide valuable guidance. Options include hourly advisors, flat-fee planners, and online advisory services.

Fees & Costs

06

How much does a wealth manager typically charge?

Wealth managers typically charge 0.5% to 2% of assets under management (AUM) annually. The percentage often decreases as assets increase:

  • First $1M: 1.0% - 2.0%
  • $1M - $5M: 0.75% - 1.5%
  • $5M+: 0.5% - 1.0%

Some wealth managers also charge additional fees for financial planning or specialty services.

07

What are the different fee structures for financial advisors?

Assets Under Management (AUM)

0.5% - 2% annually of managed assets

Most Common
Hourly Fees

$150 - $500+ per hour

Project-Based
Flat/Retainer Fees

$2,000 - $10,000+ annually

Predictable
Commission-Based

Earn from product sales

Less Common
08

Are wealth manager fees worth it?

The value depends on your situation. Wealth manager fees may be worth it if:

  • You have complex financial needs requiring coordination
  • Tax savings exceed the fees paid
  • You lack time or expertise to manage investments
  • You need estate planning and wealth transfer strategies

Studies suggest good advisors can add 1.5% to 4% in net returns through better asset allocation, tax strategies, and behavioral coaching.

Services & Offerings

09

What's the difference between investment advisors and financial advisors?

Investment Advisors focus specifically on managing investment portfolios, while Financial Advisors may offer broader services including financial planning, insurance, and retirement planning.

However, these terms are often used interchangeably. Always ask about specific services offered rather than relying on titles.

10

Do wealth managers handle taxes directly?

Most wealth managers provide tax planning strategies but don't prepare tax returns unless they're also CPAs. They typically:

  • Coordinate with your CPA or tax professional
  • Implement tax-efficient investment strategies
  • Plan for tax implications of financial decisions
  • Optimize retirement account distributions
11

Can a financial advisor help with estate planning?

Financial advisors can help with basic estate planning like beneficiary designations and account titling. For complex estate planning involving trusts and advanced strategies, they typically coordinate with estate attorneys.

Wealth managers often have more extensive estate planning capabilities and established relationships with estate planning professionals.

Choosing the Right Professional

12

How much money do you need for a wealth manager?

Most wealth managers require $500,000 to $1 million in investable assets as a minimum. However, this varies by firm:

Boutique Firms $1M - $5M+
Private Banks $1M - $10M+
Independent Advisors $500K - $2M
Large Firm Divisions $250K - $1M

If you're below these thresholds, consider working with a financial advisor who serves clients at your asset level.

13

What credentials should I look for?

CFP® (Certified Financial Planner)

Comprehensive financial planning knowledge, fiduciary requirement

Most Recognized
CFA® (Chartered Financial Analyst)

Deep investment expertise, common among wealth managers

Investment Focus
CPA (Certified Public Accountant)

Tax expertise, valuable for complex situations

Tax Specialist
ChFC® (Chartered Financial Consultant)

Similar to CFP with additional insurance focus

Comprehensive

How to verify: Check CFP Board's directory, use FINRA BrokerCheck, and search SEC's Investment Adviser Public Disclosure database.

14

What questions should I ask when interviewing advisors?

Essential Questions to Ask:
  1. Are you a fiduciary at all times?
  2. What are your credentials and experience?
  3. How are you compensated?
  4. What is your typical client profile?
  5. What services do you provide?
  6. What is your investment philosophy?
  7. How often will we meet and communicate?
  8. Who will be my primary contact?
  9. Can you provide client references?
  10. Have you ever been disciplined by regulators?

Pro Tip: Ask for a sample financial plan or investment report to see their work quality.

15

Can I switch from a financial advisor to a wealth manager later?

Yes, many clients start with a financial advisor and transition to a wealth manager as their assets and complexity grow. This is a natural progression that can work well if:

  • You've outgrown your current advisor's capabilities
  • Your assets now meet wealth manager minimums
  • You need more comprehensive services
  • Your tax and estate planning needs have become complex

Some firms offer both services, allowing seamless transitions. When switching, ensure proper transfer of accounts and tax documentation.

Advisors from any firm Search on your terms

Ready to Find Your Wealth Match?

Whether you need a wealth manager for complex estates or a financial advisor for retirement planning, our platform makes it easy to connect with the 'right' kind of professional in minutes - not months.

3-minute assessment
No obligation
100% free
Start Your Journey
Continue Learning

Related Resources & Guides

Deepen your understanding with our curated collection of financial planning resources

View All Resources
🔍
Verification Tool
Background Check • Free Tool

FINRA BrokerCheck

Free tool to research the background and experience of financial brokers, advisors, and firms.

Check Now
AdvisorFinder
Personalized Match
Smart Advisor Search • 3 minutes

Find Your Wealth Manager

Stop wondering whether you need a wealth manager or financial advisor. Our intelligent assessment analyzes your specific situation to connect you with a professional.

Start Free Assessment