Financial Advisor, Wealth Advisor, Investment Advisor: What’s the Difference?

Time to Read: 5 minutes

Once you’ve decided it’s time to get some professional financial help, you may be asking yourself: “Which type of financial professional is best for me?” From a financial advisor to an investment advisor to a wealth advisor, it’s helpful to know the differences between each category of financial experts before committing to a long-term engagement.  

Term #1: Wealth Advisor

With more money comes more responsibility, and wealth advisors’ duties are catered specifically to those who have a decently-sized estate, often labeled as high-net-worth and ultra-high-net-worth individuals.  In addition to covering the standard offerings of financial planning like retirement, investment advice and budgeting, wealth advisors cover advanced topics like risk management, company stock and compensation strategies, estate and tax planning.

At Stratos Private Wealth, we’ve taken it a step further and equipped our team with the Certified Private Wealth Advisor® designation.  You can read more about how our team leverages the CPWA® designation to help San Diego executives here.

Term #2: Financial Advisor

The most common term, a financial advisor is someone you helps you with different aspects of your financial life. This might include planning for and transitioning to retirement, investment advice, life insurance, 401(k) plans, IRAs, budgeting and more. Every financial advisor is different in what specific areas they specialize in and what services they provide, so if you are looking for help in one particular area, it is always best to ask.  A widely recognized industry designation is the Certified Financial Planner™ (CFP®) designation, which is broad-based in focus.

Term #3: Investment Advisor

An investment advisor is a professional who focuses on just that – your investments. An investment advisor will manage your portfolio with the goal to get the highest rate of return that you can over the long run. Before they begin designing your portfolio, investment advisors should evaluate your current financial picture, as well as determine your optimal risk tolerance, which may involve you filling out a questionnaire.

After discussing your needs and goals with your advisor, they typically will then present an investment strategy tailored according to the unique aspects of your life. Some investment advisors actually manage your money and do the investing for you, other simple “advise” on what you should do, leaving you to implement the strategies on your own.

How to Choose?

Keep in mind, many firms may categorize their own business under more than one of these labels (they might say they are a “financial advisor” as well as a “wealth advisor”. The best course of action is always to contact any financial professional you are interested in working with directly, ask about their level of service, what other types of clients they work with and  services they provide.

If you want to learn more about Stratos Private Wealth you can checkout this 7 minutes read, 9 Reasons to Manage Your Wealth with Us: A Better Way

Stratos Private Wealth is a division through which Stratos Wealth Partners, Ltd. markets wealth management services. Investment advisory services offered through Stratos Wealth Partners, Ltd., a registered investment adviser.  Stratos Wealth Partners and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only; and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.  To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision.  Investing involves risk including possible loss of principal. Some of the information contained herein has been obtained from third party sources which are reasonably believed to be reliable, but we cannot guarantee its accuracy or completeness. The information should not be regarded as a complete analysis of the subjects discussed.