An investment advisor and a wealth advisor

The Ritcey Report

September 20, 2016

There’s an old adage from vaudeville that goes like this: A comic says funny things; a comedian says things funny. While I sometimes think this is a distinction without a difference, the gulf separating an investment advisor from a wealth advisor is actually both considerable and significant. Let me explain.

An investment advisor is someone whose primary professional focus is on portfolio performance. The client of an investment advisor can expect to hear a great deal of discussion about how their portfolio consists of a careful combination of different asset classes – such as fixed income, equities and cash – structured in a way to reduce risk while potentially increasing returns.

There is absolutely nothing wrong with this kind of approach, and we at the Ritcey Team embrace it, as far as it goes.

A wealth advisor – the Ritcey Team operate fundamentally in this second category – believes in a more holistic, all-encompassing strategy. Our clients expect and receive personalized investment advisory and portfolio management services. And they expect competitive investment returns where security, and the prudent management of risk, is fundamental. Well and good.

But we, as wealth advisors, go further.

We believe that wealth management encompasses more than day-to-day investment advice, important though that is. It includes financial planning, tax minimization, insurance, retirement planning, estate and trust counsel, inter-generational wealth transfer considerations, and legacy creation.

All these issues – and sometimes others, depending on the circumstances of the individual client we’re advising – are closely connected. In our view, no credible long-term wealth building strategy can afford to ignore them.

In short, there’s a significant separation between making money and building wealth. It is very important, if you are considering engaging professional help in managing your assets, that you understand the sharp distinction and profound difference between the two.