Choosing the right financial professional can be intimidating, especially when there are so many titles to choose from. And while titles for professions like financial advisor and wealth manager are often used interchangeably, there are differences in their services and how they approach their client work, says Jeff LaBelle, a wealth advisor from Sarasota, Florida.
Wealth managers are a specific kind of financial advisor who, as their name suggests, work with wealthier clients. Because higher net worth often means more complicated investments, regulations, tax laws, etc., wealth managers are adept at navigating complex financial situations. Even if you don’t have a six-figure income, if you have a complicated financial situation, a wealth advisor may be able to help you better than the average financial advisor.
What Is a Financial Advisor? Jeff LaBelle Explains
A financial advisor helps clients with a wide range of financial issues and services. Typically they cover financial planning and investment advising and management. However, anyone in the industry can call themselves a “financial advisor”, explains Jeff LaBelle.
So you should ask the person you’re hoping to work with about their specialties before you hire them. Certified public accountants, life insurance underwriters, and financial planning experts can all be considered financial advisors. Always ask about a financial planner’s certifications and licenses before hiring them. If they are unwilling to show them to you, that’s a major red flag.
What Is a Wealth Manager?
Wealth managers are a specific subset of financial advisors. The clients they choose to work with are what set them apart from the rest, explains Jeff LaBelle. Wealth managers usually deal with clients who have a great deal of wealth. Often they offer comprehensive, concierge-style services that include:
- Financial planning
- Tax services
- Legal planning
- Estate planning
- Retirement planning
- Investment management
Services may vary depending on the individual and the client’s needs. The fees you pay when working with a wealth manager versus a financial advisor are typically very similar. You should expect to pay at least a small percentage of your assets under management, and possibly an hourly rate or monthly or annual retainer on top of that. Make sure the fee structure is clear and easy to understand before you start working with a health manager or a financial advisor.
When you’re deciding between a financial advisor or a wealth manager, the most important thing to consider is the complexity of your portfolio and the amount of assets you possess. Many wealth managers have a minimum asset requirement of $250,000 or higher. But other advisors may require their clients to be worth at least $1 million before working with them.
If you’re looking for one specific service, consider going with a specialized financial advisor in that field. But if you want help with it all and prefer a holistic approach and one contact person, a wealth advisor may be right for you, says Jeff LaBelle.
Information and research for this article can be found here.
The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. Estate planning is done in conjunction with your estate planning attorney, tax attorney and/or CPA.
Investment decisions must be made on individual Risk Tolerance, Investment Objectives and Time Horizon.