Wealth Manager vs Financial Advisor: Key Differences Explained

Managing money is not just about selecting stocks or saving for retirement and forgetting about it. You also need to have a plan in place that suits your financial needs.  

Some individuals require help with selecting the appropriate investments, while others might want a foolproof plan to build and preserve their wealth. 

Financial advisor and wealth manager are two common terms that pop up when seeking professional help. 

Although they might sound interchangeable, they have different functions. One helps you build wealth, while the other enables you to maintain it. Knowing the difference can prevent you from hiring the wrong professional.

Let us break it down into more detail. 

Wealth Manager vs Financial Advisor 

In India, the term financial advisor is often used loosely, but SEBI has clear definitions. 

SEBI-registered Investment Advisors (RIAs) are the only individuals or entities legally authorised to provide personalised investment advice on securities for a fee in India. ‘Financial advisor’ is a broad term; always verify SEBI registration before accepting investment advice. They can advise on securities, portfolios, and financial planning involving investments like mutual funds or stocks. RIAs act as fiduciaries, which means they are legally bound to put client interests first.

A wealth manager usually serves high-net-worth individuals and families, providing a comprehensive suite of services that includes advanced financial planning, tax and estate coordination, philanthropic guidance, and long-term wealth preservation—often in collaboration with legal, tax, and insurance experts. 

Note that wealth managers who want to offer investment advice on securities must be registered with SEBI as investment advisors (RIAs). Otherwise, they cannot give investment advice. 

Who Do They Serve? 

Financial Advisors: Anyone looking for investment advice on securities, from young professionals to retirees.

Wealth Managers: Typically, individuals or families with substantial assets – think crores in net worth.

If you’re seeking comprehensive advice on investments or planning for retirement and other goals, a financial advisor can help. A wealth manager is a better choice if you are a high-net-worth individual with multiple assets and complex tax needs.

Services They Offer

Both financial advisors and wealth managers help clients manage their money, but the depth and complexity of their services differ.

A financial advisor provides guidance on building wealth and managing personal finances. Their services include:

• Investment Advice – Recommending mutual funds, stocks, and bonds based on financial goals.
• Retirement Planning – Helping clients save for a comfortable future.
• Debt Management – Creating strategies to reduce expenses and increase savings.
• Insurance Planning – Assessing coverage needs and referring clients to IRDAI-licensed agents for policy recommendations and purchases. Similarly, tax/estate execution should be done by a qualified CA or legal professional.

A wealth manager provides a higher level of financial planning and caters to high-net-worth individuals. Their services include:

• Investment Management – Creating diversified portfolios for long-term wealth growth.
• Estate & Retirement Planning – Structuring assets for seamless wealth transfer to younger generations and building financial security.
• Tax Optimisation – Using advanced strategies to minimise tax liabilities.
• Risk Management – Protecting assets from market fluctuations and unexpected risks.
• Philanthropy Planning – Assisting clients in making charitable contributions.

Key Differences: Financial Advisor vs. Wealth Manager

Feature	Financial Advisor	Wealth Manager
Who They Serve	Anyone seeking investment guidance	High-net-worth individuals and families
Investment Focus	Helps clients grow their money through investments	Builds and preserves long-term wealth
Retirement Planning	Advises on savings and investment strategies	Includes estate planning and wealth transfer strategies
Tax Strategies	Basic tax-efficient investment advice	Advanced tax optimisation for high-income individuals
Estate Planning	Minimal involvement	Comprehensive estate and succession planning
Philanthropy	Not a primary service	Helps with charitable foundations and trusts
Fees	Fixed fees or a percentage of assets advised (AUA)	Typically, a percentage of assets under management (AUM)

Which One Do You Need?

It all depends on your unique financial situation and goals. A financial advisor is an excellent fit for someone who can give you investment advice. A wealth manager is recommended for high-net-worth or ultra-high-net-worth individuals because their financial needs are more complex. 

Conclusion

Both financial advisors and wealth managers play crucial roles in financial planning. The key is knowing what you need and understanding the difference between a financial advisor and a wealth manager.

However, before you make a decision, assess your financial goals, the complexity of your assets, and the type of guidance you need. The right guidance can make all the difference in securing your financial future. 

Still unsure about what you need? Our experts can help you make the right financial decisions. Get in touch with Scripbox today!

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