The difference is mostly what’s managed and how it’s priced, because neither title is regulated in the US. A financial planner usually advises on your whole financial picture and charges for the advice: fee-only planners who publish prices charge a median $4,500 a year for ongoing planning or $2,000 for a one-time plan. A wealth manager usually takes over your investments as well, and wraps planning, tax and estate coordination around them, priced as a percentage of the assets: the median rate is 1%, or about $10,000 a year on $1 million. So the real question is whether you want someone to run your money, not which title they use.
The short version
| Financial planner | Wealth manager | |
|---|---|---|
| Core job | Advice on decisions: cash flow, retirement, taxes, insurance, estate | Managing your investments, with planning built around them |
| Manages your investments | Sometimes | Almost always |
| Typical price | Flat or hourly: a median $4,500 a year, $2,000 per plan, $300 an hour | A percentage of assets: a median 1%, often lower on larger balances |
| Minimums | Often none | Often a minimum balance |
| Who’s on the team | Often one planner | Often a team: planner, investment staff, sometimes tax and estate specialists |
| Who it usually suits | Anyone with decisions to make, at any balance | Households who want the money run for them, often with larger or more complex portfolios |
Those are habits, not rules. Plenty of planners manage portfolios, and some wealth managers charge a flat retainer. FINRA’s view of the planning profession applies to both titles: it “doesn’t have its own regulator.” What’s regulated is the investment advice, which our guide to financial planner vs financial advisor explains.
What a wealth manager adds
The word “manager” is the clue. A wealth manager typically:
- Runs the portfolio: chooses investments, rebalances, trades, and decides which holdings go in taxable and tax-deferred accounts
- Handles complexity: concentrated stock, trusts, private investments, charitable giving, several family members’ accounts
- Coordinates other professionals: works with your CPA and estate attorney so the investment plan, the tax return and the documents agree
That last part is often what people are paying for at higher balances. See advisors in the public graph who focus on estate planning or ultra-high-net-worth households.
Credentials are a useful hint. Among fee-only advisors in the public graph, 41% hold the CFP, the main planning credential, while 10% hold the CFA, an investment analysis credential, and 0.2% the CPWA, which is aimed at advisors to high-net-worth clients. A firm that calls itself a wealth manager and has a CFA or a dedicated investment team is likely doing real portfolio work. Our guide to CFP vs CFA vs CPA explains each.
What a planner does without managing money
Many planners give advice and leave the investing to you. You keep your accounts at a custodian or a robo-advisor, and the planner tells you what to do with them. This is called advice-only planning, and it suits people who are comfortable placing a few trades a year. Our guide to advice-only planning covers it.
What each costs
The tiered schedule is an example, not a published median; firms set their own breakpoints. The two fees often buy different work, so compare what’s included before you compare the numbers. If a flat-fee planner also manages your portfolio, the gap is real savings. If they don’t, you’re doing that part yourself.
Our flat fee vs percentage of assets guide finds where the two cost the same, about $450,000 at the medians. For dollar totals over 10 and 20 years, see $1 million, $3 million and $5 million. And if you’re paying 1% now, is a 1% fee too much? shows what it should buy.
Minimums are lower than the “wealth” label suggests. Of 781 US fee-only firms whose websites state a minimum, 50% say they have none.
When a planner is the better choice
- You’re happy running simple investments. A few index funds don’t need a manager.
- Your decisions are complex but your assets aren’t large yet. High earners, people with stock grants, families saving for several goals. See advisors for high earners.
- You want a fixed price. A flat or hourly fee doesn’t rise because markets did. Browse flat-fee advisors.
- You need one decision made well. A one-time plan may be all you need.
When a wealth manager is the better choice
- You don’t want to manage money at all. Not the trades, not the rebalancing, not the tax-lot decisions.
- Your holdings are complex. Concentrated stock, trusts, a business sale, private investments, or accounts across generations. See family wealth transfer specialists.
- You want one firm to coordinate everything. Tax, estate and investment decisions made together, by people who talk to each other.
How to check what you’re actually being offered
The title won’t tell you. The firm’s brochure will. Look the firm up on the SEC’s adviser search and open its Form ADV Part 2A:
- Item 4 has to “describe the types of advisory services you offer.” Look for both financial planning and portfolio management.
- Item 5 gives the fee schedule, including breakpoints, and says whether fees are negotiable.
- Item 7 discloses any “minimum account size.”
Then ask in the first meeting:
- What share of your clients have a written financial plan, and how often do you update it?
- Is planning included in the percentage, or billed separately?
- Who on your team would I actually work with?
- Do you or your firm earn anything besides what I pay you directly?
The last question matters most. “Wealth management” is also a common name for brokerage accounts at banks and large brokerage firms, where the advisor may be paid commissions. A fee-only firm is paid only by you, whatever it calls itself. Our guide to telling whether an advisor is fee-only shows where to look, and is my financial advisor a fiduciary? explains the two duties you might be dealing with.