When it comes to managing your finances, you may have heard the terms “wealth management” and “financial planning” used interchangeably. However, while they are related, there are some key differences between the two that are important to understand.
Wealth management refers to the professional services focused on investing and growing your assets. It involves investment management, tax strategies, estate planning, philanthropic planning, and more – all with the goal of building and preserving your wealth over time. Wealth managers take a holistic, long-term approach to help you meet your financial objectives.
In contrast, financial planning is more focused on your current finances and near-term goals. Financial planners help with budgeting, debt management, insurance needs, saving for big purchases or expenses, retirement planning, and other aspects of your day-to-day finances. The emphasis is on organization, prioritization, and optimal usage of your existing income and assets.
While wealth management deals with investment portfolios often worth millions, financial planning guides those with fewer investable assets. According to a 2022 study, the median relationship size for a financial advisor was $300,000 versus $1.8 million for a wealth manager.
That said, there is an overlap between the two. Wealth managers may provide advice on budgeting, taxes, and retirement savings in addition to long-term investing. Meanwhile, financial planners look at big-picture goals and model different scenarios to help clients achieve them. An integrated approach utilizes both wealth management and financial planning strategies.
The key is understanding your individual needs. Wealth management makes the most sense if you have significant assets or complex tax and estate plans. Financial planning is better suited for budgeting, managing debt, saving for near-term goals like a home purchase, and making the most of your money.
Kunvarji provides comprehensive financial advisory services incorporating both wealth management and financial planning strategies. Their expert team takes the time to understand your unique objectives and situations to provide personalized guidance. With Kunvarji as a partner, you can feel confident that your finances are optimized for long-term growth while still meeting your day-to-day needs. This is especially important as research shows wealth management serves higher net-worth individuals according to a 2022 study by PriceMetrix. With this range of expertise, Kunvarji can provide tailored solutions whether you’re focused on near-term budgeting or building substantial generational wealth.