Comparing Financial Advisors to Wealth Managers
Financial advisors and wealth managers are both responsible for helping people reach their financial goals, yet each career has a different focus. The following article will explain many of the key similarities and differences between these two jobs, as well as outline some of the basic roles and responsibilities associated with each position.
|Job Title||Education Requirements||Median Salary (2016)*||Job Growth (2014-2024)**|
|Financial Advisor||Bachelor's Degree||$58,286||30%|
|Wealth Manager||Bachelor's Degree||$79,750||30%|
Sources: *Payscale.com and **U.S. Bureau of Labor Statistics
Responsibilities of Financial Advisors vs. Wealth Managers
Both financial advisors and wealth managers work closely with clients to assess their needs and create a plan of action to help them achieve their financial goals. While customer service and industry expertise are extremely important in both careers, financial advisors tend to deal more with average earners looking for ways to reach short- or long-term goals; wealth managers typically work with more affluent clients to help them grow and protect their existing investments. Financial advisors usually specialize in one area, such as retirement or college savings, while wealth managers are able to provide advice on a wide variety of financial products and services. Financial advisors are able to work more directly with clients, whereas wealth managers frequently act as consultants, managing a team of experts that may include analysts, private bankers, accountants, and others.
A financial advisor plays a key role in helping clients invest their money in order to reach a specific financial goal. These include short-term goals like reducing debt, increasing charitable giving, or budgeting, or long-term goals like saving for retirement, paying for college, or generating additional income. A good financial advisor will also help his or her clients understand why a particular product or strategy is recommended. Networking is important to building a strong client base, so those interested in a career as a financial advisor should have good interpersonal and communication skills. In addition to working a typical 40-hour week in an office environment, many successful financial advisors spend a considerable amount of time outside of working hours meeting clients, marketing, networking, or attending conferences.
Job responsibilities of a financial advisor include:
- Building relationships to earn client trust and confidence
- Analyzing a client's financial information and preparing a tailored plan to help achieve goals
- Researching and understanding financial markets, new and existing products, legislative changes, and legal regulations and requirements
- Preparing annual reports to inform clients of their progress toward meeting financial goals
- Participating in and accurately reporting successful completion of professional continuing education programs
Wealth managers are primarily charged with improving an affluent client's financial health. This comes in many forms, depending on the goals and circumstances of each individual client. Wealth managers have expertise in a wide range of financial products and services, including taxes, insurance, estate planning, asset management, and investing. This collection of accounts is called a portfolio, and wealth managers must often supervise and coordinate with a team of professionals on a single account. Rather than focusing on a single goal or product, wealth managers must be able to assess their clients' comprehensive financial situation, determine their unique priorities, and offer services that best address these requirements, enlisting the help of other financial professionals as needed.
Job responsibilities of a wealth manager include:
- Communicating regularly with high net worth clients regarding portfolio performance, changes, maintenance, and potential problems
- Maintaining and growing relationships with attorneys, accountants, bankers, and others in order to generate leads and referrals for new business
- Arranging and facilitating meetings with clients and portfolio team
- In-depth understanding of local, state, and federal financial regulations as they relate to client portfolios
- Performing comprehensive risk assessments and working with outside vendors to protect client assets
If a job as a financial advisor sounds interesting to you, you may also want to consider a career as a real estate broker, another job where networking and building client relationships is an essential skill. If a career in wealth management is appealing, you may be interested in becoming a financial manager, working to help companies address and manage their financial objectives.