In the process of building wealth, there are times where consulting a wealth advisor or financial planner may be beneficial. Working alongside a professional can provide an air of accountability and help individuals assess their current financial situation, create a personalized plan, and stay on track for financial success.
The Key Differences Between a Wealth Advisor and Financial Planner
Whereas the terms “wealth advisor” and “financial planner” may seem synonymous, there are key differences between the two. For example, wealth advisors usually assist clients with a high net worth. In addition, some wealth advisors hold an extra layer of expertise. The Certified Private Wealth Advisor designation equips wealth advisors to advise and administer a more hands-on approach with wealthy clients whose net worth typically begins at $5 million. Though wealth advisors are not required to obtain the Certified Private Wealth Advisor designation, it is certainly encouraged.
On the other hand, a financial planner typically does not provide as much hands-on support as a wealth advisor. Instead, they may provide guidance for the client as needed or consult with them a few times each year. In addition, financial planners mainly help their clients in terms of lifestyle planning. Simply put, this includes more common financial activities, such as budgeting, preparing for retirement, and other life events. Many of the clients that financial planners advise are middle-class versus wealthy.
Benefits to Hiring a Wealth Advisor or Financial Planner
There are many benefits to hiring either a wealth advisor or financial planner, such as having a professional who can help you successfully navigate your finances and create an action plan for success. In fact, Business Insider reported one of the top benefits of staying on top of your finances: peace of mind. In a study conducted by Northwestern Mutual, 92% of the 2,000 participants stated that being on top of their finances contributed to their peace, happiness, and overall wellbeing. Though that percentage does not represent the number of individuals who had a financial advisor (66%), the fact remains that having a financial plan in place contributes to peace and happiness that stems from a sense of preparedness.
Signs You May Need Professional Financial Help
If you are not sure where you stand or where to go from here, that may be a sign that you need financial help. Instead of guessing or relying on the advice of a friend, seeking out a wealth advisor or financial planner can help you strategically navigate the nuanced decisions of life. Whereas it may be tempting to put some of the heavy decisions on the back burner, confronting them head-on with sound financial advice can contribute to resounding success in meeting short-term, medium-term, and long-term financial goals.
The key difference between wealth advisors and financial planners is that wealth advisors typically assist clients whose net worth begins at $5 million, whereas financial planners typically have a middle-class client base who they can help with lifestyle planning. There are many benefits to working with either a wealth advisor or financial planner, including a personalized financial strategy, sound advice, and someone who can remove the stress and help you make financial decisions in peace.
Are you in need of wealth-planning assistance? Get in touch with our team of wealth and tax strategists at ProVision today!