Wealth in the U.S. is on the rise. Between 2019 and 2022, median U.S. family wealth increased by 8%—from $466,500 to $504,000, according to the Congressional Budget Office.
This news is music to the ears of financial advisors and wealth managers, professionals who are dedicated to helping people manage their money. The two job titles are often used interchangeably, and they share many commonalities and responsibilities—however, they prioritize serving two distinct classes of investors.
Here’s everything you need to know about the similarities and differences between financial advisors and wealth managers—and how to pick the best one for your financial situation.
Financial advisors work with clients to help set financial goals and develop a comprehensive plan to achieve them
Their responsibilities are equally related to financial analysis and relationship building, says Sarah Vita, chief talent officer at Equitable Advisors. “They don’t just do math and spreadsheets—it’s so much more,” she says.
The advisors can provide advice on everything from investment management and retirement saving to taxes and insurance to individuals of various net worths. Advisory firms require clients to have at least a few thousand dollars in investable assets before a relationship can be formed. For example, Edward Jones requires a $5,000 minimum investment to begin working with an advisor.
Financial advising is a promising career, Vita says, for three main reasons:
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Impact: You can make a positive difference in others’ financial lives, like by helping them save for their children’s college fund or retirement.
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Flexibility: You can often control your schedule, which is great for working women and moms in particular.
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Income potential: Your income is a reflection of how hard you work, but you can easily earn six figures.
According to the U.S. Bureau of Labor Statistics, the median wage of personal finance advisors is just shy of $100,000, and the job outlook is over 4x the national average for all occupations.
“There’s never been a better opportunity to be in the profession of financial advising than in the next 10 years,” Vita says.
Think of a wealth manager as a financial advisor on steroids. A wealth manager conducts the responsibilities of a financial advisor but caters to high-net-worth individuals (HNWIs). Besides investment management and tax planning, wealth managers spend additional time on topics like:
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Estate planning: Ensuring a direct transfer of assets following a death.
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Charitable giving: Donating money can have tax implications, especially when giving away a significant amount.
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Maintaining wealth: Managers ensure certain assets have the proper protections.
