Financial adviser vs wealth manager: what are the key differences?

What is a financial adviser?

A financial adviser can offer a broad range of financial services. Typically, they provide advice on things, including retirement planning, tax management, and investment strategies.

Sometimes, a financial adviser may only specialise in specific areas, such as estate planning or pensions.

You can find a financial adviser at a financial services firm, or working independently.

What is a wealth manager?

A wealth manager is a type of financial adviser who specialises in working with individuals with a high net worth.

They tend to work more closely with their clients and offer comprehensive, ongoing financial advice on investing, philanthropy, tax services, asset protection and estate planning.

You can find a wealth manager through a financial firm that caters to clients with high net worth. Alternatively, you can opt for a self-employed wealth manager.

Financial adviser vs wealth manager: what is the difference?

The main difference between financial advisers and wealth managers is the type of client they typically work with.

Financial advisers take on clients from a broad spectrum of income levels and financial needs, while wealth managers work exclusively with clients with a higher net worth.

So, if you are wondering if you need a financial adviser or wealth manager, start by assessing what kind of client demographic you fit into. 

There’s no official definition of what constitutes ‘high net worth’ but it’s often considered to be individuals with investable wealth worth £1 million or more.

Both roles will be regulated by the Financial Conduct Authority.

Qualifications

To become a financial adviser or a wealth manager, you must obtain qualifications in financial services or economics.

You can also benefit from qualifications in corporate communication, data analytics, and negotiation. 

There are not many differences in qualifications between the two professions. However, experience in each field is essential for pursuing them. 

Service costs

Generally speaking, a financial adviser charges less than a wealth manager.

You could be priced for a one-off job, for example £500 for investment advice, or £2,500 for a defined benefit pension transfer.

Or, you might pay a percentage of the value of your portfolio - typically between 1% and 2%. Some financial planners will charge by the hour.

Wealth managers  tend to charge percentage fees based on their client’s portfolio value.

Both  financial planners and wealth managers should discuss the fees they charge before you proceed.

Client relationship

There is a big difference in how financial advisers and wealth managers handle client relationships.

A financial adviser’s relationship with a client can be shorter term than that of a wealth manager, but they can work with clients for a long period of time.

Wealth managers tend to work more closely with clients and on a long-term basis as they handle larger sums of money, often bound to family estates.

They may manage more of your financial affairs than a financial planner.

Do I need a financial adviser or wealth manager for my needs?

The type of financial guidance you need will normally depend on your wealth. The more well-off you are, the more likely you are to benefit from a wealth manager.

Both financial advisers and wealth managers can offer long or short-term services across various financial areas.

However, one is bound to meet your needs more than the other, so let’s re-examine the fundamental services of each:

Financial adviser

You are more likely to need a financial adviser if you are seeking practical and affordable financial guidance.

A financial adviser can give you one-off sessions or help you with an ongoing issue, from pension and tax planning to first-time investments and budgeting. 

Wealth manager

If you are a high-net-worth individual seeking help managing your wealth strategically, you will likely need a wealth manager who will work closely with you over a long time to manage your resources and investments and offer guidance on asset management. 

Get expert financial advice

A financial adviser helps many clients manage their finances effectively, from tax planning to retirement.

A wealth manager focuses on providing high-net-worth individuals with long-term advice on managing their wealth. 

Unbiased can help you quickly match with a financial adviser who can offer tailored advice so you can reach your future goals.