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How Wealth Manangement Planning Is Different From Other Financial Advice

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At first blush, the concept of wealth management planning might sound a lot like another term for financial advice. Wealth managers and financial advisors, however, operate in significantly different domains and work with clients who have different goals. Here are 5 ways wealth management is different.

More Money

The biggest distinguishing feature is what the term wealth means. Generally, wealth management applies to work for clients who either have large reserves of money and essentially live off the interest or earn annual incomes in the hundreds of thousands or millions of dollars. In other words, there's simply more money under management.


It's common for a wealth manager to have a more active role in making decisions and moving money around. Financial advisors are typically coaching folks to get their debts and incomes to a point where they can be consistently cash-flow positive. A wealth manager is usually working with clients who are past that stage. Instead, these clients are dealing with enough wealth that they need assistance with managing it on a daily basis.

Consequently, it's normal for a wealth manager to have more direct control over money. Many clients will also require their managers to enter into fiduciary relationships, meaning there are consequences for mismanagement.

Different Cost Concerns

While wealth management principles do still keep an eye on cost control, most of the concerns tend to be more macro. To the extent that cost is still an issue, it is in the form of things that eat away at wealth. These are problems like taxes, inflation, and lack of portfolio diversification.

Bigger Goals

Folks engaged in wealth management planning tend to have bigger targets. While someone working with a financial advisor might plan to buy a house or prepare for retirement, wealth management clients are worried about acquiring companies, dealing with estates, and sequestering their wealth in safe harbors. They're also frequently concerned with the issue of maintaining multigenerational wealth.

Diverse Financial Vehicles

Working with more affluent folks means finding more outlets for their money. Generally, someone who has a few million dollars should not sink all of their wealth into one class of assets. You don't want to be subject solely to the whims of the stock market, for example.

Diversification also means trying to avoid sectors with common triggers for downturns. This often requires more research to determine what the long-term and tail risks are, and how to mitigate them and preserve the client's wealth when crises inevitably occur.

For more information about wealth management planning, contact a local agent.