Wealth Management v/s Financial Planning

Wealth Management v/s Financial Planning

Wealth Management v/s Financial Planning

Difference Between Wealth Management & Financial Planning


In this article, we are going to compare wealth management v/s financial planning. These two terms – wealth management and financial planning are often used interchangeably in investment world and interpreted as the same. However, there are some key differences.

Wealth Management v/s Financial Planning

Wealth Management v/s Financial Planning
Wealth Management v/s Financial Planning


  1. Wealth Management
    • In simple words, Wealth is an accumulated resource or the value of existing assets a person own. Generally, Net worth is a measure of wealth of an individual. Wealth management is all about managing one’s wealth/ Net worth.
    • As part of wealth management, investors often actively try to identify and take advantage of profit-making opportunities.
  2. Financial planning
    • While Financial planning is a comprehensive assessment of your financial situation and your future goals. It involves creating a financial plan to help you answer important questions such as: How much do I need to save for retirement?
    • In short, Financial planning is the establishment of a process for attaining your financial goals by a thorough evaluation of your current financial status and exploring opportunities to improve it.


  1. Wealth management is an Opportunity-oriented personal finance management. It predominantly deals with preservation, growth and further accumulation of the existing wealth.
  2. On the other hand, Financial planning is Goal-oriented personal finance management. It mainly deals with building/creating the strategies to create wealth and meet financial goals either short-term or long-term.

3.For Whom

  1. Wealth mangement is basically meant for the high net worth individuals. Thus, wealth management is undertaken by wealthy people who have already achieved or fulfilled their basic financial goals.
  2. Financial Planning is for every individual who are yet to meet their financial goals It is for anyone who wants to make the best out of the money they have, through personal finance, to meet their financial goals; be it short-term or long-term. Financial planning does it by taking your income, expense and savings into account and balancing them.

4.Comprises of

  1. Wealth management comprises of :
    • Wealth Assessment
    • Risk Tolerance Assessment
    • Asset Allocation
    • Wealth Preservation Strategy
    • Wealth Growth Strategy
  2. Financial planning comprises of :

5.Type of Management

  • Wealth Management is a Active wealth management process. Here, a wealth manager will make decisions based on your portfolio, your risk tolerance and your preference for wealth preservation or wealth growth. The wealth manager will execute the asset allocation by investing in various asset classes based on your risk profile.
  • On the other hand, Financial planning is a Passive wealth management process. In this, a financial planner will make and suggest a plan based on income and the financial goals. The financial planner suggests the asset allocation based on your risk profile.

6.Financial Decisions/ Recommondations are Based on

  • In case of wealth management, wealth manager takes financial decisions by considering only your investment portfolio. Alternative assets such as private equity, real estate might also be considered.
  • While in case of financial planning, financial recommondations are given considerating the financial goals and the time horizon for realising those goals.


  • A holistic plan will help you identify your risks, fix your income leakages, set measurable goals, and create wealth in the process. Financial planning does not require you to have sufficient wealth. As you execute the plan, you will be able to create an investible surplus, cover your risks through insurance and make investments suiting your risk profile. You can create your free financial plan by visiting our website- https://investyadnya.in/
  • On the other hand, wealth management comes into picture when you have created wealth and need professional help to grow, preserve and enjoy your wealth. It requires the active monitoring of the wealth manager to identify the right mix of investments for you. Having a financial plan in place is the first step to create wealth.

1 Comment on "Wealth Management v/s Financial Planning"

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: