Investment advisors are great for managing your investments. But are they the right professional for your needs? First, what is an investment advisor?

An investment advisor is someone who is either series 6 or series 7 licensed with FINRA and who has passed a series 66 given by the state of California. In other words, they are licensed to offer securities and investment advice through the proper federal and state authorities. They may also have other designations which add to their education level in the financial industry. One thing is for certain; to achieve a passing score on those exams they must have a basic understanding of investments, tax, insurance, estate planning, and retirement planning.

Investment advisors tend to focus their service on providing investment advice which involves proper investment selection, asset allocation, and diversification. Some investment advisors pay attention to the tax attributes as they specifically apply to the investment holdings in the managed account. This means they may harvest gains and losses out of one’s investment portfolio in an effort to minimize tax implications. They usually do not consider other tax attributes and tax planning strategies outside of the realm of investments.

In a nutshell, investment advisors focus their attention specifically on investments. The clients are expected to discuss other financial issues outside of investments with their respective advisors (tax, insurance, estate).

Wealth managers, on the other hand, consider the whole picture in every detail in order to capitalize on every opportunity to maximize one’s wealth. Wealth management can be defined as a professional service which is the combination of financial/investment advice, accounting/tax services, legal/estate planning, and insurance planning for one fee. It is, by definition, a holistic approach to understanding and providing solutions to all of the major financial challenges of an investor's financial life.

Wealth managers generally have the same qualifications as investment advisors, but with the addition of other credentials like Certified Financial Planner™, Masters Degree in Financial Planning, Masters of Business Administration, Certified Public Accountant, etc. They generally have a higher level of experience, education, and certifications.