When it comes to finances, make sure you’re working with someone who has your best interests in mind—and the skillset to meet your particular needs. Private wealth managers and financial advisors are two types of advisors who might be helpful but only in certain circumstances.
What Is a Private Wealth Manager?
A private wealth manager is a professional who helps high-net-worth individuals and families manage their assets and investments. These individuals are often employed by large banks or independent firms, and their duties may include investing clients’ money, providing financial advice and preparing tax returns.
If you’re an entrepreneur or small business owner and you have a particular bank or other financial institution that you work with frequently, you may have access to the firm’s private wealth facilities. The professionals in this department can help you with business or personal financial planning, including retirement savings, business financing and potentially insurance needs.
Datalign Advisory
Access to thousands of financial advisors.
Expertise ranging from retirement to estate planning.
Match with a pre-screened financial advisor that is right for you.
Answer 20 questions and get matched today.
Connect with your match for a free, no-obligation call.
Expertise ranging from retirement to estate planning.
Answer 20 questions and get matched today.
What Is a Financial Advisor?
A financial advisor is a licensed professional who provides financial advice to clients, particularly regarding specific securities or investment strategies. Financial advisors usually work with a variety of clients, including individuals, businesses and other organizations. They may provide services such as investment management, financial planning and even estate planning.
If you have some money saved—even if it’s not a lot—you can find a financial advisor to help you plan for your financial future. These advisors may be independent or part of larger firms. They can help you choose and trade securities, structure long-term savings and potentially arrange life insurance policies or long-term care coverage.
Private Wealth Manager vs. Financial Advisor
The main difference between a private wealth manager and a financial advisor is that private wealth managers typically only work with high-net-worth individuals and families—often large clients of a bank or other institution. Financial advisors, on the other hand, work with a variety of clients, not just high-net-worth individuals and families. Private wealth managers also often have more experience in broad areas of finance than financial advisors.
Private Wealth Manager and Financial Advisor Comparison
| Private wealth managers | Financial advisors |
|---|---|
|
Focus on high-net-worth individuals and families
|
May work with a variety of clients
|
|
Often have more experience and expertise than financial advisors
|
Specific training and licenses related to securities and investment strategies
|
|
Investment management, financial planning and tax preparation services
|
Investment management and financial planning services
|
|
Generally higher fees than financial advisors
|
Fees often charged as commission on the sale of securities
|
|
Not always regulated by the Financial Industry Regulatory Authority (FINRA)
|
Regulated by FINRA
|
Private Wealth Manager vs. Financial Advisor Fees
When choosing a private wealth manager or financial advisor, it’s important to compare the fees charged for similar services. For example, if you’re looking for someone to provide investment advice, you should compare the fees charged by wealth managers and financial advisors for investment management services.
Wealth Management vs. Financial Planning Fees
| Private wealth manager fees | Financial advisor fees | |
|---|---|---|
|
Hourly rate
|
$100 to $500+
|
$100 to $400
|
|
Annual fee
|
1% to 3% of assets under management
|
$1,000 to $5,000 or 0.5% to 2% of assets under management
|
|
Project-based fee
|
$5,000 to $50,000+
|
N/A
|
|
Commissions
|
N/A
|
Up to 5% of transaction value for securities or 12% for insurance sales
|
Private wealth managers typically charge higher fees than financial advisors. However, the exact fees charged will vary depending on the specific services provided and the experience of the wealth manager or financial advisor.
Do I Need a Private Wealth Manager or a Financial Advisor?
If you’re looking for someone to help manage your finances, you may want to consider working with a private wealth manager. Private wealth managers typically have more experience and expertise than financial advisors, and they can provide a variety of services, such as investment management, financial planning and tax preparation.
Some needs that a private wealth manager can help you with include:
- Investment decisions
- Cash management
- Life and long-term care insurance
However, private wealth managers typically charge higher fees than financial advisors, which can be hourly, annual or project-based. If you’re working with a tight budget or have more limited needs, you may want to consider a financial advisor instead.
Financial advisor fees are typically lower and are often charged as a percentage of assets under management. These professionals are regulated by FINRA, so you can be sure that they are qualified to provide financial advice.
Areas where financial advisors can help include:
- Choosing specific investments or investment strategies
- Buying or selling securities, including annuities
- Exploring insurance options (only if your advisor is properly licensed)
Tips for Choosing a Financial Professional
Choosing a financial professional is a big decision, and one that can have serious long-term financial implications. It’s important to choose carefully when deciding what type of professional to work with. Here are some tips to help you choose the right advisor:
- Make sure they are fully licensed and qualified to help with your particular needs
- Ask about their prior experience and areas of expertise
- Find out the specific products and services the advisor offers, and the applicable fees
- Get referrals and recommendations from trusted sources
- Meet with the advisor to see if you’re compatible and make sure they explain things in a way you can understand
- Check the advisor’s background and disciplinary history
- Confirm any licenses or financial advisor certifications, including whether the advisor is registered with the FINRA or SEC (if they’re a licensed investment advisor as well)
- Thoroughly read any agreements before you sign (including the fine print)
- Get everything in writing before you make a decision
Looking For A Financial Advisor?
Get In Touch With A Pre-screened Financial Advisor In 3 Minutes
Looking For A Financial Advisor?
Via Datalign Advisory
