When it comes to managing your finances, there are a variety of professionals available to help you. Independent Financial Advisors (IFAs) and Wealth Managers are two of the most in demand. However, they both provide different approaches and services. Do you know which one is right for you?

If you google “financial advisor”, many different titles appear on the screen: consultant, planner, manager, representative. Searching for the right person to help you make the most out of your finances can be overwhelming and getting it wrong may cost money as well as time. In this article, we focus on two of the most common advisors people look for when organising their finances in the UK: independent financial advisors (IFAs) and wealth managers.

Even though both offer financial consultation services, the most recognisable difference between a wealth manager and a financial advisor is the type of clients that each works with. Some financial advisors are willing to work with just about anyone wanting financial advice or help with their money management. A wealth manager generally works with people who have a large sum to invest, but not exclusively. Let’s have a closer look at what both can offer and which one can help you get the best out of your finances.

Independent financial advisors are professionals who provide advice on a wide range of financial products and services. They are typically self-employed or work for smaller firms and do not have any ties to specific financial institutions. This means that they are free to recommend any financial product or service that they believe is in their client's best interest. However, in many cases, an IFA will outsource the management of their customers' portfolios to wealth managers (who are referred to as discretionary fund managers).

Some of the benefits of working with an IFA are that, since they are not tied to any specific financial institution, they can offer independent advice. They offer a wide range of products from different providers and, even though they often work with a wide number of clients, they can offer a personalised service. On the other hand, IFAs typically charge fees for their services, which can be higher than other types of advisors. Being small firms, they also have limited resources and may not offer some of the services that Wealth Managers offer, such as tax or estate planning.

Wealth managers are professionals who specialize in managing the assets of different individuals. They typically work for larger financial institutions and have access to a wide range of resources and services. Many of their clients are high-net-worth individuals, but they regularly offer services for all types of economic status as well.

They offer a wide range of services, including investment management, tax planning, estate planning, and more. Wealth managers also have access to a wide range of resources, including research and analysis, that may not be available to smaller IFAs. But the biggest advantage may be that wealth managers have specialized expertise in managing different types of portfolios and may be better suited to handle complex financial situations.

David Henry, Investment Manager with Quilter Cheviot, observes: “For individuals with large amounts of investable wealth, ensuring appropriate structuring and risk management is essential. Mis-steps in investment strategy or how assets are allocated will be more expensive to individuals with large asset bases. On top of the natural investment expertise that a wealth manager offers, they should be available to help clients through periods where markets are volatile, to act as a source of support to ensure that the plan is stuck to even when emotions are running high.”

Since wealth managers usually work with high-net-worth individuals, fees may appear to be higher, however, these fees are usually charged as a percentage of the amount invested. Wealth managers often work for a financial institution, so they may be restricted to offering the services that this company provides – but not always. Despite this, many wealth managers build up long and trusted relationships with their clients. “I often say to clients that it is my job to ensure that they do not need to get rich twice”, Herny adds.

What are the costs involved when getting financial advice from them?

Fees across the industry vary widely. Both wealth managers and financial advisors can charge an hourly fee for their consultation work, as well as an ongoing charge expressed as a percentage of assets under management (AUM). The rate card for both IFA and wealth managers is generally 1%. However, this can vary depending on what you have in the portfolio. At the same time, there are some financial advisors that are fee-based. This means that they could receive a commission if they advise you to buy certain securities, whereas wealth managers don’t earn commissions.

The decision between working with an IFA or a wealth manager ultimately depends on your individual needs and preferences. If you are looking for independent advice, an IFA may be the right choice for you. Nonetheless, the fact that Wealth Managers work for larger financial institutions means that they may receive a level of support that an IFA may not be able to provide.

If you require comprehensive financial services and have complex financial needs, a wealth manager may be better suited to your needs.

Independent Financial Advisor or Wealth manager:  Which one is right for you?

David joined the Quilter Cheviot London office in 2017. He previously worked at LGT Vestra LLP, where he managed discretionary mandates on behalf of private clients, as well as independent financial advisers. He has particular experience in managing the affairs of dentists and medical professionals, both working and retired.

Investment Manager

David Henry

As a wealth manager, Quilter Cheviot utilises its expertise in both Investment Management and Financial Planning to deliver a comprehensive and holistic service. This allows them to create bespoke financial plans and investment portfolios specifically designed to meet clients’ individual needs.

Quilter Cheviot’s Investment Managers have been trusted to help grow and preserve clients’ wealth for over 250 years. Their heritage dates back to 1771, and they have offices in several regions in the UK, in Dublin, Dubai and Jersey.

Quilter Private Client Advisers treats every financial journey as unique. They have a dedicated team focused on delivering a truly personalised service, always holding clients' interests at heart. They follow a holistic approach that enables them to develop a lifelong financial plan for clients, based on individual finances and aspirations. They offer a wide range of advice including, but not limited to, first home purchases, considerations around retirement and passing on wealth. 

Quilter Private Client Advisers also works alongside both Quilter Cheviot, it's sister company and award-winning discretionary fund management firm, and many professionals involved in managing clients' financial affairs, to help them deliver a comprehensive service. 

Quilter Cheviot is one of the largest discretionary investment management firms across the UK, Ireland and Channel Islands, managing bespoke investment portfolios for individuals and families for generations. Quilter Cheviot has over 36,000 clients and £25.9 billion of AUM (as at 31 March 2023).

Each client is assigned an experienced, dedicated Investment Manager who will create and manage their investment portfolio to help them achieve their own specific goals at every life stage. Their investment Managers have an average of over 16 years’ industry experience, with over 10 years at Quilter Cheviot.

Quilter Cheviot's Investment Managers are supported by one of the largest in-house research teams in the discretionary industry, consisting of 22 analysts covering equity, fixed interest and collective (fund).

Quilter Cheviot

Poppy's primary role is the management of private client, trust and pension portfolios working with both intermediaries and direct clients. She tries to build long term relationships with her clients and their advisers with the aim to provide excellent service.

Poppy joined Quilter Cheviot in 2020 having spent over 13 years at Brooks Macdonald. Poppy joined Brooks Macdonald in 2006 where she had various roles, latterly as an Investment Director.

Investment director

As a discretionary investment manager, Andrew helps clients on their journey towards achieving their financial goals. He works closely with individuals, families, business owners, trustees, intermediaries, and pension schemes. Andrew enjoys finding out what is important to them and helping them understand, often complex, investment matters in a clear and simple way.

He has over 20 years’ experience in the investment industry. Prior to joining Quilter Cheviot in 2021, Andrew worked at Brewin Dolphin, as an investment manager, and Barclays Wealth where he led the national UK Equities Committee.

Nigel's primary role is managing portfolios for private clients, pension funds, companies, and charities, ensuring that his clients’ get the best service Quilter Cheviot can offer, guiding them through investment choices that occur during their lifetime.

Having commenced his investment management career with Adams & Remers solicitors in Sussex, he gained significant experience at Berry Asset Management (latterly Bordier & Cie) before helping to set-up Quartet Capital Partners in 2010, where he was Partner. Nigel joined Quilter Cheviot in early 2013.

He's proud to have made the PAM top 40 under 40 list two years in a row. This programme is established as a guide to rising stars in the private banking and private asset management sectors.

David Henry

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Independent Financial Advisor or Wealth manager: Which one is right for you?

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David Henry

Bio

Articles from author

Independent Financial Advisor or Wealth manager: Which one is right for you?

Start your journey to your Financial well-being

FIND OUT MORE

LEGAL

CONTACT US

Start your journey to your
Financial well-being