How Digital Transactions Are Changing the Way We Spend
Before getting off a rickshaw, or upon approaching a store counter, or while paying f...
India’s economy is growing fast. The average income is rising, but most people still don’t know how to manage their finances. According to National Centre for Financial Education, only 27% of Indians understand basics like saving, budgeting, or investing.
Managing finances isn’t easy. It’s part science and part art. Most of us don’t have the skills to do it right. But three professionals do: fund managers, wealth managers, and financial planners.
Two of them cater to specific financial needs, while one is essential for everyone.
Which one do you need?
Let’s break it down.
Who is a Fund Manager?
A fund manager is a professional who manages investment portfolios like mutual funds, hedge funds, or exchange-traded funds (ETFs). Their primary role is to ensure that the asset or fund they manage grows, generates returns, and beats benchmarks.
What Does a Fund Manager Do?
- Manages pooled money from multiple investors, not individual portfolios.
- Focuses on fund performance, market research, and portfolio rebalancing.
- Makes buy/sell decisions based on investment strategy.
- Does not provide personalised financial advice—only focuses on growing the fund.
Please note – Fund managers are driven by large pooled money, not individual investor needs.
Who is a Wealth Manager?
A wealth manager is a financial professional who works with high-net-worth individuals (HNIs/UHNIs) to preserve and grow wealth. Unlike fund managers who focus only on investment funds, wealth managers create customized strategies that balance risk, tax planning, estate planning, and asset allocation.
What Does a Wealth Manager Do?
- Focuses on high-risk assets, wealth preservation, and growth.
- Manages diverse asset classes like stocks, bonds, real estate, and alternative investments.
- Works closely with HNIs but may not always align with their financial behaviors.
How Do Wealth Managers Charge You?
- Asset-Based Fees – A percentage of the total assets they manage (100-200 bps).
- Consultation or Retainer Fees – Fixed charges for estate planning, tax strategies, or personalised advisory.
- Performance-Based Incentives – Some wealth managers earn bonuses based on the returns they generate.
Who Needs a Wealth Manager?
If you have a high net worth and want a specialist to manage your wealth, minimise risks, and maximise returns, a wealth manager is the right choice.
Who is a Financial Planner?
A financial planner is a Qualified professional who helps you achieve your financial goals through personalised planning and strategic advice. Financial planners don’t just focus on investments. They look at the big picture of your finances, including budgeting, loan management, retirement planning, and emergency planning, tax planning and sometimes will creation. Their role is to provide actionable strategies that guide you toward long-term stability and peace of mind.
In other words, Financial planners are responsible for making sure that all of your finances are in harmony with each other and they are helping you achieve a state of financial wellbeing.
How Do Financial Planners Charge You?
Consultation Fees
Clients pay for one-time sessions where the planner provides advice or creates a detailed financial plan.
Comprehensive Planning Packages
Some planners offer bundled services, covering everything from retirement planning to insurance evaluation, for a fixed fee.
If you’re someone —seeking to align your finances with your goals—a financial planner can help you take control and move confidently toward your future.
Why does everyone need a Financial planner?
While fund manager or wealth manager might be needed by some, Financial planner is for everyone
Fund managers and wealth managers cater to specific needs, but a financial planner is essential for everyone.
Not everyone requires the expertise of a fund manager to grow a complex portfolio or a wealth manager to oversee substantial assets.
Fund Manager vs Wealth Manager vs Financial Planner
| Aspect | Fund Manager | Wealth Manager | Financial Planner |
|---|---|---|---|
| Primary Role | Manages specific asset classes and tracks market movements. | Manages and increases wealth for HNIs and UHNIs. | Provides holistic financial planning, including liability, tax, insurance, budgeting, and retirement planning. |
| Focus Area | Fund performance, market research, portfolio rebalancing. | High-risk assets, wealth preservation, and growth. | Individual financial goals, behavior management, and asset allocation. |
| Personalisation | No personalised asset allocation; manages a pooled corpus. | Focuses on individual asset allocation aimed at generating alpha. | Tailors personal financial strategies based on individual needs and risk profile. |
| Core Responsibility | Ensures the asset/product grows, generates returns, and beats benchmarks. | Generates alpha and manages the wealth of HNIs/UHNIs. | Helps individuals achieve financial milestones with peace of mind. |
| Investor Consideration | Driven by large pooled money, not individual investor needs. | Works directly with HNIs/UHNIs but may not always align with their financial behaviors. | Focused on personal finance and holistic planning for individuals and families. |
| Investment Decisions | Makes buy/sell decisions for pooled investors based on strategy. | Focuses on increasing and preserving wealth with asset allocation. | Guides on asset allocation while integrating all aspects of financial planning. |
| Fee Structure | Earns fees based on alpha generation or fixed fees (10-50 bps). | Earns fees linked with performance (100-200 bps). | Charges annual fixed fees or a percentage on advisory value (200-400 bps). |
| Key Distinctions | Should not perform asset allocation; focuses only on fund performance. | May not prioritise client behavior towards financial decisions. | Should not time the market but recommend appropriate asset allocation strategies. |
