Wealth Management and Financial Planning Bring Very Different Results for Clients

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Should you rely on a financial planner, or should you choose someone who specializes in wealth management to build your financial portfolio? What’s the difference between the two? Continue reading to not only discover the difference but also why it is more advantageous to use a wealth management firm like Porte Brown.

What is Wealth Management?

Wealth management firms, such as the firm run by Frederick Baerenz, are highly skilled in handling complex financial issues for their clients. They specialize in counseling clients with comprehensive financial advice. Wealth management is not only considered as the highest level of financial planning but also comprehensive investment management.

Areas of expertise include:

  • Tax Guidance,
  • Estate Planning
  • Personalized Legal Assistance
  • Risk Management

A wealth advisor or manager tailors investment strategies to help clients remain in control of their assets and maintain a strong financial portfolio. While they typically aim to help the most-affluent clients and provide expertise in areas such as tax mitigation and estate tax, very often wealth advisors are coordinating with other experts in the field, including high-level accountants and tax attorneys. When you hire a wealth management firm, you’re hiring a team of experts working on your behalf.

Wealth Management vs. Financial Planning

When it comes to comparing wealth management and financial planning, a key distinction is that wealth management provides customized solutions for your investments. CEO Frederick Baerenz, and other wealth managers, focus on personal goals, individual financial circumstances, and goals that are geared toward specific financial outcomes.

Whether you need strategies for reducing tax burdens, restructuring a retirement account, or maximizing pre-tax investments such as profit-sharing (401k), wealth management is preferable. The primary goal of a financial planner is to assist with lifestyle planning. While that is a broad definition of their role, the distinction between wealth management and financial planning is not.

Generally speaking, a personal financial advisor or a financial planner can be considered as exceptionally skilled in budget planning, cash flow planning of liquid assets, and providing strategies for saving for a child’s college education. Financial planners are widespread across all levels of income, but they are rarely chosen for the most affluent as stand-alone advisors. However, they are sometimes chosen as part of a wealth management firm to provide their specific expertise That said, according to Business Insider, the main distinction between wealth managers and financial planners (like Lincoln Frost) is individual expertise.

Wealth managers are mostly chosen by banks and private firms, but they also work with clients who are either already high-end or have the potential for future wealth, such as someone receiving an inheritance. The same is true for financial planners, but most of them often work independently as opposed to a designated firm.