Wealth Management Services vs. Financial Planning: What’s the Difference?

Wealth Management Services vs. Financial Planning

When it comes to managing your money yourself, things can quickly get tricky and confusing. The good news is, planning for your future need not be as complex as you think. You can avail of professional wealth management services and financial advisor services to plan for a bright future.

While both will help you manage your money, wealth management is usually sought by high-net-worth individuals. Financial planning is broad and more about creating a plan/portfolio of assets that help you achieve your goals.

It’s true that financial planning and wealth management are often used interchangeably. But there are several differences between the two.

Financial planning is an umbrella term that covers all facets of your financial holdings, such as budgeting, saving for retirement, estate planning, and so on. On the other hand, wealth management services are comprehensive and specifically tailored to meet the needs of high-net-worth individuals.

If you want to understand what these services entail and which one’s better for you, start by educating yourself about the differences between them. Let’s dive in.

Financial Planning

Financial planning is a systematic process that helps align your life goals with your personal finances. It helps individuals manage their everyday expenses as well as investments. The process involves examining your goals and helps you prioritize, save, and invest money to meet your goals in a timely manner.

Activities related to financial planning include debt management, cash flow management, risk management, contingency funds, and so on. Various financial instruments like life insurance and fixed-income schemes may be used to achieve the desired results.

Financial planning can also help you plan for your future goals like higher education, marriage and family, buying a home, and retirement, among others. Tax management is another important aspect of financial planning that can help you save money.

Wealth Management

Wealth management involves preserving and growing your wealth over a period of time. As mentioned, wealth management services are typically availed of by high-net-worth individuals such as business persons and affluent families.

You should know that wealth management services are geared towards a niche segment. These services revolve around creating a personalized strategy with the help of several financial instruments and services. These may include bonds, equities, property, commodities, and more. All in all, wealth management helps people secure wealth while using existing wealth to grow it further.

Activities associated with wealth management services include estate planning, capital gains assessment, tax management, and generally identifying and implementing profit-making moves. The right wealth management services will help you solidify your finances through proper asset allocation.

Wealth Management Services vs. Financial Planning

Difference between Financial Planning and Wealth Management

Mentioned ahead are a few important differences between financial planning and wealth management services.

1. Clientele

Financial planning and wealth management are designed for different sets of clients. Financial advisor services can be utilized by most people, including high-net-worth individuals. These services are meant to help you not only save, but also invest your money smartly to achieve the desired financial outcomes.

High-net-worth individuals or those who have a significant amount of wealth may leverage wealth management services. This way, they can put their money to work and grow their existing wealth manifold while also preserving it.

2. Goal

The ultimate goal of financial planning is to help you manage your income and expenses in a way that brings you closer to realizing your life’s goals. A financial advisor will assess your income and goals, and inform you whether you have sufficient funds to achieve them.

Wealth management involves managing your current and accumulated wealth lying in different assets, and investing them wisely. It also helps wealth managers chart a plan to invest your money in different lucrative instruments for growth.

3. Considerations

Financial planning considers your daily expenses, monthly income, taxes, savings, and tax planning. You get a financial road map that allows you to accumulate enough wealth to match your financial objectives.

Wealth management services consider only your accumulated wealth. It is concerned with growing your wealth with high-yielding returns.

4. Client Involvement

Financial planning doesn’t require the active participation of the client. They only need to act according to the plan created by their financial advisor.

Wealth management, on the other hand, needs the active participation of the client. You’ll have to work with your wealth management services provider to make optimal investment decisions that help maximize and preserve your wealth.

5. Consultant Fee

Both wealth managers and financial planners may charge an hourly fee for their consultation services. This can be anywhere between $100 – $500.

Usually, Assets Under Management (AUM) means the difference between the fees charged by these professionals. Financial planners typically charge a little less than wealth managers, who can charge up to 3% or more of the AUM amount.

Moreover, some financial advisors may be fee-based advisors, i.e., they could receive a commission for recommending specific financial products. Having said that, these professionals have the fiduciary duty of putting your needs before their recommendations. Wealth managers, however, don’t earn commissions for advising products.

Which One’s More Suitable for You?

If you are wondering whether you should go for financial planning or hire professional wealth management services, you’re not alone.

Simply put, wealth management is more suitable for those who have multiple sources of income, fall under a higher tax bracket, and invest frequently. As you can see, it is centered around preserving and growing wealth over the long term. However, if you have a fixed income and a limited budget to work with, financial planning can work well for you.

In Conclusion

Both financial planning and wealth management are important for managing your hard-earned money. While these services are created to help you better plan your future, they’re significantly different. Knowing about the key difference between financial planning and wealth management services will help you understand which one will help you reach your financial goals.

Article Written By: Sandy Funches is a freelance writer who enjoys writing. Writing is of utmost importance to her as doing so helps her educate people by spreading her knowledge.


Samantha Paul is an accomplished financial advisor and a experience writer at She has a wealth of knowledge and expertise in helping individuals and businesses navigate the complex world of finance. With a strong commitment to empowering her clients and guiding them towards financial success, Samantha has built a reputation for delivering personalized, results-driven strategies.