Financial planning and wealth management represent subdivisions of financial advising. A financial advisor provides financial advice to his customers in exchange for compensation. The definition of financial advice, however, is extremely broad. The type of advice a financial advisor confers, along with the products he offers and the types of clients he works with, determines the subclassification under which he falls. Financial planners primarily assist with lifestyle planning. This includes budgeting, cash flow planning, and saving for college and retirement. Though a financial planner's client list may span the income gamut, most are middle class and have a strong need to make their money go as far as it can.

Wealth managers, by contrast, are financial advisors who offer services mostly needed by high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs). These services include capital gains planning, estate planning and risk management. A simple way to consider the distinction between a financial planner and a wealth manager is a wealth manager manages literal wealth, while a financial planner manages the finances of everyday clients who are trying to get ahead in finance.

Both careers attract bright young finance professionals from top colleges and universities. Each has advantages and disadvantages. For example, financial planning jobs are more abundant, but wealth management typically pays more. Financial planning firms are more likely to take a chance on a recent graduate with no experience; wealth management firms tend to offer better hours and come with less stress.

Education

Most successful financial planners and wealth managers possess at least a bachelor's degree. Beyond that, it is not state or federal licensing boards but individual firms within each industry that set educational requirements for potential hires. In addition to simply having a degree, earning it from a top-ranked school, such as the University of Chicago or one of the Ivies, gives you a big advantage over your competition. Many wealth managers are licensed attorneys or Certified Public Accountants (CPA), though neither are requirements for the profession. Fewer financial planners have these designations, but they never hurt.

As a financial planner, you will want to get your Certified Financial Planner (CFP) designation. This requires passing a comprehensive exam that covers specialties in financial planning, such as real estate, portfolio management and tax planning. A CFP designation serves as a huge asset on your resume, and if you go into business for yourself, clients love to see it.

Wealth managers pursue several designations to beef up their resumes and convey confidence and expertise to clients. Perhaps the most prestigious of these is Chartered Wealth Manager (CWM) designation. Before trying for this designation, you must have three years of verifiable experience in the industry.

Skills Needed

Though you might consider these careers because you are strong in math or have a knack for the markets, the most important attribute for success is your sales ability. As a rookie, it is doubtful that your employer is going to hand you clients to work with, particularly the kind of HNWI clients that make people wealthy in these professions. Your first order of business as a financial planner or wealth manager is to pound the pavement and build your book of business.

If you are not gregarious, a natural people person and an insatiable networker, the odds are stacked against you. Being good with people is the single most important skill for basically anyone under the broad umbrella of financial advising.

Apart from sales ability, you must love the markets and enjoy keeping up with them around the clock. This applies no matter which of the two careers you choose. Finance is more fast-paced than ever, and clients demand financial planners and wealth managers who are high-energy and stay ahead of the curve.

If you choose wealth management, having a strong natural market, while not an absolute necessity, sure makes your life easier during the early years of your career. Finding HNWI clients is tough, and getting them to trust you with their vast wealth when they do not know you and you have little experience is tougher. For candidates with lucrative connections, wealth management can provide a much faster path to a high income than financial planning.

Starting Salary

Salary is somewhat of a misnomer, given the majority of your income in either career comes from commissions. Firms offer small base salaries or draws to get you through the early months of building your book of business. However, they attach expectations to that money. You have sales targets you are expected to hit. If you are unable to do so, your employer cannot pay you to warm a seat for long.

The average annual income for wealth managers, as of 2018, is roughly $94,000, according to Glassdoor. For financial planners, the average is $57,000. However, a huge gamut of data comprises these averages, depending on performance, your income could be much higher or much lower.

Job Outlook

Financial advising jobs, under which financial planning and wealth management are classified, are expected to grow by 14% between 2016 and 2026, double the 7% growth outlook across all occupations, according to the Bureau of Labor Statistics. The subcategory of financial planning tends to track closely with the trend for financial advising as a whole. Wealth management, by contrast, enjoys explosive growth when the economy booms, but it contracts more than financial advising as a whole during down economies.

Work/Life Balance

Expect some long hours working as a financial planner or wealth manager. Young financial planners, in particular, spend a lot of time during the early years on client acquisition. The sales aspect of your job alone could exceed 40 hours per week. On top of that, you still must service your clients and track the market. Wealth managers also must devote time to building a book of business. Because they manage so much money per client, however, it takes a smaller client base to become successful. On average, a wealth manager enjoys a better work/life balance than a financial planner.

Which One to Choose

Both careers require the same skill set. You must be able to sell, you must love the markets, and it helps to be good with numbers. Lean toward wealth management if you have a robust natural market of HNWIs. You have an advantage few young professionals enjoy, and wealth management provides the best opportunity to exploit it and become successful quickly. If your natural market is not so robust, financial planning is a much easier field to break into. Persevere through the difficult early years and build a substantial book of business, and you can enjoy a strong income and the lifestyle that comes with it.

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