Financial planning and wealth management represent subsets of financial advising. A financial advisor provides financial advice to customers in exchange for compensation. The definition of financial advice, however, is extremely broad. The type of advice given, along with the products offered and the types of clients served, determine whether you are considered a financial planner or wealth manager.

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, provide services mostly needed by high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs), such as capital gains planning, estate planning and risk management.

A simple way to think about the distinction between a financial planner and a wealth manager is that a wealth manager manages literal wealth, while a financial planner manages the finances of everyday clients who are trying to get ahead.

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

If you are considering a career as a financial planner or a wealth manager, here are some things to consider. 

Education

Most successful financial planners and wealth managers possess at least a bachelor's degree, and one earned from a top-ranked school, such as the University of Chicago or one of the Ivy Leagues, provides an advantage over the competition. Beyond that, individual firms within each industry set educational requirements for potential hires rather than state or federal licensing boards. 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.

Aspiring financial planners will want to get a 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 is as a huge asset on your resume, and if you go into business for yourself, clients love to see it.

Wealth managers can also pursue several designations to beef up their resumes and convey confidence and expertise to clients. Perhaps the most prestigious is the 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 becoming a financial planner or wealth manager because of your math skills or knack for the markets, your sales ability is much more important to your success. As a rookie, it is doubtful your employer will hand you clients to work with, particularly the kind of high-net-worth clients that make people wealthy in these professions. So, 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 almost 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, no matter which of the career paths 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" of HNWIs, while not a necessity, certainly will make 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 good connections, wealth management can prove more lucrative than financial planning.

Starting Salary

Salary is somewhat of a misnomer, given the majority of income from either career comes in the form of commissions. Firms typically offer small base salaries to get you through the early months of building your book of business. In exchange, you will be expected to hit sales targets. If you are unable to do so, your employer is not likely to 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, and 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

You can expect some long hours working as a financial planner or wealth manager. Young financial planners, in particular, spend a lot of time on client acquisition during the early years of their career. The sales aspect of the 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. If you have a robust natural market of HNWIs, you may want to lean toward wealth management, as you will 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. If you persevere through the difficult early years and build a substantial book of business, you can enjoy a successful career.

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