What Is A Wealth Advisor?

The two most important things you can do for your financial well-being are to increase it and keep it secure. A wealth advisor, sometimes known as a wealth manager, is a certified financial planner who works with high-net worth individuals (HNW) and their families.

The goal of a wealth advisor is to help their customers amass a comfortable financial future by assisting them in making sound financial decisions now. They may also be able to help with tax and estate planning advice.

You may want to hire a wealth advisor if your net worth exceeds a few million dollars and you own many assets. When people of means require guidance in handling their wealth, they often consult with wealth advisors.

What Do Wealth Advisors Do?

Wealth advisors are a sort of financial advisor that works with very wealthy individuals and provides comprehensive financial planning, including estate planning, tax assistance, and legal advice, in addition to investment management. Wealth advisors often deal with customers that have more complex financial demands than basic portfolio management, and they frequently need a minimum commitment of millions of dollars.

The word “wealth advisor,” like many other sorts of financial advisors, is only a name; an advisor who refers to oneself as a wealth advisor is not required to have any schooling or qualification, though many wealth advisors do have different licenses and certifications.

Wealth advisors help high-net-worth clients with financial planning and investment management. They develop wealth management strategies that take into account their customers’ short- and long-term financial objectives.

Financial Planner vs Wealth Advisor: What’s the Difference?

A financial planner is a broad phrase that refers to a professional that helps individuals and families with complete financial planning services. Financial planners may assist you with a wide variety of financial services, including budgeting, retirement planning, investing, and other elements of your money.

Wealth advisors, on the other hand, specialize on wealth management (both cash and other assets) and investment. They deal with customers that have a high net worth (usually in the millions of dollars) and can offer more specialized services such as tax preparation and estate planning.

If you have a high net worth, a financial advisor may still assist you, but they will not often provide the breadth and depth of services that a wealth advisor does.

What Are the Qualifications of a Wealth Advisor?

Although the phrase “wealth advisor” refers to a broad category of financial consultants, if you want to find someone who can provide you with the finest advice, you should check for particular credentials.

To begin, the majority of wealth advisors have a bachelor’s degree in a finance-related discipline. Many have postgraduate degrees, such as a master’s degree in business administration (MBA), or certificates, such as chartered financial analyst (CFA), certified financial planner (CFP), or certified public accountant (CPA).

A wealth advisor may also possess Series 7, 65, or 66 licenses from the Financial Industry Regulatory Authority (FINRA) and must maintain these licenses by completing continuing education courses on an ongoing basis.

Many wealth advisors are registered investment advisors in addition to having degrees, qualifications, and perhaps securities sales licenses. This enables them to advise customers on investments and investment strategies and to charge a fee for managing client funds.

Accredited Investment Fiduciary

Nancy Hite is qualified as an Accredited Investment Fiduciary® (AIF®) to give the financial guidance required to help you construct the roadmap you need to pave the path toward your objectives. An Accredited Investment Fiduciary is obligated to operate in the best interests of their clients. The word fiduciary responsibility refers to a planner’s obligation to put their client’s financial interests ahead of their own. In practice, a fiduciary financial planner must provide their customers with the best available solutions at the lowest possible cost, regardless of the fees or commissions the planner receives from the client or other sources.

When selecting a financial advisor, it is always ideal to go with a fiduciary so that you know the goods and services they offer are best for you, not them.

Wealth Advisory Services

Wealth advisors provide a variety of services based on their licenses, certificates, and expertise. Among the most frequent are:

Investment Management. Wealth advisors collaborate with their clients to create investment portfolios that are in line with their objectives and risk tolerance. Advisors can provide continuing advice and direction on how to make changes to a portfolio as required. Choosing proper assets, evaluating performance, and adjusting portfolios are all part of this.

Retirement Planning. Wealth advisors may assist clients in planning for retirement by calculating how much money they will need to maintain their current standard of living. They may also assist customers in developing a retirement savings strategy and investing in the appropriate asset mix.

Tax Planning. Asset location, tax-loss harvesting, and strategic asset transfer are all methods that wealth advisors may use to assist clients reduce their tax obligation.

Estate Planning. Wealth advisors often assist clients in developing an estate plan, which includes wills, trusts, and other legal papers. They may also discover strategies to lessen gift or estate taxes.

Insurance Planning. Wealth advisors may assist clients in determining the appropriate kind and quantity of insurance coverage. This may also include examining current policies to ensure they are still applicable.

How Much Do Wealth Advisors Cost?

Wealth advisors usually charge an hourly or set fee for their services. Some financial advisors additionally charge a portion of the assets they manage for their customers (often 1% to 3%, with tiers dependent on account size).

Many financial advisors get commissions on items they market, such as life insurance. When looking for a financial advisor, be sure to inquire about all possible expenses.

Are Wealth Advisory Services Worth It?

Wealth advisory services may be quite advantageous for high-net worth clients, but most companies demand a minimum of $2 to $5 million in investable assets to get started. A wealth advisor can help you establish a wealth management strategy that suits your personal financial objectives, as well as providing useful insight and guidance on investment, tax planning, and estate planning, if you have that much money.

How to Find a Wealth Advisor

Fee-only wealth advisors may provide more comprehensive advice. Fee-only wealth advisors do not get compensation for product sales. As a result, they are more likely to provide objective advice that is in your best interests. Furthermore, they are often expected to behave as fiduciaries, which requires them to prioritize their clients’ interests.

Look through the list for the appropriate credentials. Once you’ve narrowed down your list of possible wealth advisors, look into their histories. Ascertain if the wealth advisor is duly licensed and registered with the SEC or a state securities authority. You may also use FINRA’s BrokerCheck service to look into their past.

Interview several advisors. Take some time to speak with possible prospects once you’ve narrowed down your list of advisors and confirmed their qualifications. Use this time to ask pointed questions about their products and ideas, and attempt to figure out who you’d feel comfortable working with.

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Disclosure: This information is not intended to substitute for specific individualized tax, legal, or investment planning advice. Neither Royal Alliance Associates nor its representatives or employees provide legal or tax advice. If legal or tax advice or other expert assistance is required, the service of a currently practicing professional should be sought.