What is a Wealth Management Advisor?

Published October 29th, 2020 

Reading Time: 4 minutes

Written by: The Zoe Team

Some questions we answer in this article are: What is a Wealth Management Advisor, What Does a Wealth Advisor Do,  Difference Between a Wealth Advisor and a Financial Advisor, and How to Find a Wealth Advisor.

There is a common misconception that only the extraordinarily wealthy can afford the services of a wealth management advisor. While high-net-worth individuals are often the most keen on hiring an advisor, the value of wealth management extends far beyond investment advice for the ultra-rich. Wealth management entails all aspects of a person’s financial life. A wealth advisor offers individuals a holistic approach that encompasses all the services needed to plan for current and future needs as well as manage and protect wealth. By working with other professionals like attorneys and accountants they can help serve their clients holistically. They often work with clients who have complex financial needs and demand customized and personalized approaches. As such, wealth managers tend to require a minimum level of investable liquid assets to manage.

Their service tends to be fitting for high net worth individuals with  complex needs. In short, a wealth management advisor is a financial professional who assists affluent individuals manage their wealth holistically. 

What Does a Wealth Management Advisor Do?

Broadly speaking, wealth advisors are their clients’ personal Chief Financial Officers (CFO). As a subcategory of a financial advisor, a wealth manager focuses on managing assets of high earners. Their purpose is protecting and growing your existing wealth taking into consideration your full financial picture.

To provide a customized service, wealth advisors combine a number of financial cornerstones. For instance, wealth managers offer investment management services in which they assess your risk tolerance and capacity, your financial objectives, and your time horizon. They then would create a personalized portfolio design to help you achieve your investment goals. Wealth advisors provide an additional white-glove service by fine-tuning their recommendations to unique financial circumstances. Other key services they provide are tax and estate planning. Tax planning allows you to optimize your taxes through tax harvesting and by being strategic on which account types you allocate investments to. Estate planning ensures your affairs are in order in case something were to happen to you. 

Other services offered by wealth advisors are:

  • Philanthropic planning
  • Insurance management
  • Socially responsible investing
  • Trust services
  • Cash Flow Management

A life transition is an ideal time to hire a wealth management advisor. For example, if you’re getting married, you’ll have to navigate managing and potentially merging a range of investments, savings accounts, and potential properties. That means you should get help to navigate legal, taxes, and investment matters. A wealth advisor can ease the hassle by creating a holistic financial plan for you and your partner

Is There A Difference Between a Wealth Advisor and a Financial Advisor?

A financial advisor is an umbrella term that encompasses a range of financial experts, including wealth advisors. They advise on anything financial, like investments, financial planning, or tax strategies. 

Wealth advisors are there for more than just advice. They manage the complexity that comes with your finances. They carefully consider your lifestyle, goals, cash flow, debt and assets. They can align investment income and growth with your goals, protect your assets, optimize your taxes. 

How To Find a Great Wealth Advisor

If you have the wealth and the need to hire a wealth management advisor, it is important to know how to find a great one. First, you should ensure that you’re working with an advisor who acts in your best interest. Additionally, you should look for someone with experience working with clients similar to you and your family. Most importantly, someone with whom you will be able to build a strong relationship. 

When interviewing wealth advisors, evaluate if they are someone who has experience with clients that have similar goals. For instance, if you are receiving an inheritance you will want an advisor that has plenty of clients that had inheritance and trusts. 

 In order to test the advisors knowledge base, you’ll also want to review if they have the right credentials. They should have at least one of these four reputable credentials: certified financial planner (CFP), chartered financial analyst (CFA), certified public accountant (CPA), or chartered financial consultant (ChFC). 

How a Retirement Wealth Advisor Can Help You Manage Multiple Streams of Income

Because a retirement wealth advisor understands that your needs are complex, they are an excellent asset by your side as you near retirement. They will know  how to manage your multiple streams of income, particularly when it comes to tax strategies. A wealth advisor can put a plan in place that can be a roadmap for tapping into your different streams of income. 

To do so, they will determine an estimated retirement income, or the amount you can spend to live comfortably without worrying about not having enough income in the future.  Then, the wealth advisor will figure out your required minimum distributions (RMDs) and the best way to manage them. They will know which accounts to withdraw from so assets with higher growth potential can continue compounding in a tax efficient manner. Any additional income can be reinvested into another investment account to keep it growing and building your wealth. 

A wealth management advisor can transform your wealth from a stress-riddled headache into a well oiled machine. Their capacity to offer broad services that will cover all of your complex financial needs and demands can make all the difference. And, perhaps most importantly, they will make sure your wealth is protected and growing at a pace you are comfortable with.

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