What is a Wealth Advisor?

A wealth advisor is a professional who is hired to advise individuals, families, or businesses on investment options and money management. Despite the title, a person need not be traditionally wealthy to make use of a wealth advisor’s services. Wealth advisors can help with as little as budgeting and cash management, or as much as investment portfolio diversification, estate and tax planning, and retirement investment planning. Wealth advisors are generally either accountants or lawyers who are familiar with applicable inheritance and tax laws. Advisors often work as a part of an investment or strategy team at a firm, but can also work independently.

The primary goal of a wealth advisor is to help clients structure finances in an advantageous and profitable way. The advisor will assess the client’s entire financial situation, considering assets such as stocks, retirement accounts, bank accounts, and tangible assets, and will then offer recommendations for action. The recommendations should be tailored specifically to the client’s wants. Some clients want only to maintain their current financial situation, while others want to expand their investments, shield their assets from taxes, or plan for the distribution of their assets to children and grandchildren. A wealth advisor can make recommendations—and can take action—in all of these areas, and more.

Because a wealth advisor will have access to sensitive financial information and, in many cases, will actually be managing money in different accounts, trust is an essential element in the advisor-client relationship. For this reason, many people choose wealth advisors based on prior experiences. A couple might ask their tax accountant to also structure their estate, for instance, or a businessman might ask his corporate lawyer to take a look at his investment portfolio. At least in the United States, accountants and lawyers are usually licensed to do wealth planning and advising no matter their specialty, but they may not always have the necessary expertise. While trust is the most important element in selecting a wealth advisor, expertise and experience make up a close second.

The world of investments and tax planning is complex, with different rules applicable in different jurisdictions. The very best wealth advisors usually have extensive experience working specifically with investment structuring and money management, and have a working knowledge of local and, where needed, international transfer laws. Many wealth advisors also work in firms where they are surrounded by experts who can be easily consulted. Prospective clients are usually able to interview wealth advisors before meeting with them officially, which can be a good opportunity to get a sense of the advisor’s personality, and to assess personal rapport. Clients can also use an interview to learn where the wealth advisor was trained, how he generally does business, and what kind of experience he has.

Wealth advising, for those who do it, is often an exclusive job function, though the advisors are almost always first lawyers or certified accountants. Some people enter either accounting or law with the express aim of becoming a wealth advisor, while others start out as general practitioners who then transition into wealth advising over time. Wealth advisor fees vary based on the advisor’s experience and reputation, location, and the complexity of assignments, but are in most cases commensurate with the leading fees for tax and legal professionals.