RIA, Family Office, Financial Planner... What Does It All Mean?

When people are searching for someone to help them manage their money, they enter a world of jargon. Before even getting to the financial lingo that is used to describe investing, the terminology used to describe the practitioners who are supposed to help you is nearly as confusing. The following is a guide to help you understand what types of companies there are in the industry, what they do, and the roles of the individuals that work for those companies.

Types of Wealth Management Companies

Let’s start at the company level. There are several different types of entities that manage client money. This is far from a comprehensive list, but it should address many of the most common company types you will encounter.

Company type	What do they do?	Who do they work with?
Wealth Management	A Wealth Management company is a deliberately broad term, implying that these firms offer a wide variety of comprehensive services, including financial planning, retirement strategies, and investment management. These firms can typically offer both brokerage (commission-based) and advisory (fee-based) services.	Individuals, families, retirees, small businesses, business owners, foundations, endowments, corporate retirement plans, etc.
Registered Investment Advisor (RIA)	An RIA is a company that is registered with the SEC to offer investment advice to clients. Most wealth management firms are themselves RIAs or operate under a larger RIA. RIAs often provide fee-based advisory services only (sometimes referred to as “fee-only”). To offer brokerage solutions, they must also have an affiliated broker-dealer. Those firms that offer both can sometimes be referred to as “hybrid” RIAs.	Same as Wealth Management
Financial Planner	A Financial Planner focuses on comprehensive financial planning as its core offering. It may provide other services as well, but as the name suggests, financial planning is central to what it does.	Same as Wealth Management, but typically focused on individuals and families.
Broker-Dealer (BD)	A Broker-Dealer is a company that buys and sells securities for itself and on behalf of its clients. It provides trade execution for a per-transaction commission but does not provide investment advice. Many Wealth Management firms, RIAs, and Financial Planners will offer Broker-Dealer services through an affiliate or may themselves be registered as a BD.	Same as Wealth Management, however, they may also serve institutional investors, and issuers/underwriters to help distribute new securities.
Asset Management	An Asset Management firm focuses specifically on managing portfolios of securities, often around specific strategies. These companies have expertise in managing particular types of investments — for example, they may specialize in small U.S. stocks, foreign stocks, corporate bonds, and so on. They may also manage broad pools of assets or debt around a specific strategy. Asset Management firms do not typically provide broad financial advice to individual clients. It is very common for financial advisors to delegate some or all of their investment decisions to one or more Asset Managers. This category can also include Hedge Funds and Private Equity, Credit, and Real Estate firms.	Financial Advisors, High-net-worth individuals, institutional investors, corporations, government entities, etc.
Private Wealth Management/ Private Bank	As the name implies, Private Wealth Management firms typically serve a smaller, more exclusive subset of wealthy clients. High net worth individuals have unique issues related to planning, estates, taxation, private securities, etc. that require the specialized expertise that Private Wealth firms provide.	Same as Wealth Management, though they typically focus on clients with $10 million or more in assets.
Family Office/ Multi-Family Office	When individuals reach extreme levels of wealth, they will often bring the management of their investments “in-house” creating their own registered entity. They will either form a company with a small group of high-net-worth friends or partners (a Multi-Family Office), or create a separate company for just their own family wealth (a Family Office). These firms typically employ in-house accountants, estate attorneys, and provide concierge services like bill pay, travel services, property management, etc.	Typically families that have at least $50 million in assets, though most are much larger.

Types of Financial Advisors

You will also encounter various titles for the individual advisors within these companies. Here are some of the most common:

Advisor Type	What do they do?	Who do they work with?
Financial Advisor (FA)	Financial Advisor is a broad term for financial professionals that serve clients’ wealth management needs. FAs help create financial plans, allocate investments, assist with insurance and risk management, address tax and estate issues, etc. Financial Advisors may also be referred to as Wealth Managers.	Individuals, families, retirees, small businesses, business owners, foundations, endowments, corporate retirement plans, etc.
Financial Planner	A Financial Planner assists with many of the same things as an FA, but tends to focus on retirement strategies for individual investors.	Same as a Financial Advisor, but tends to focus on individuals and families.
“Fee-Based” or “Fee-Only” Financial Planner	An advisor who only works in a fee-based (i.e. fiduciary) capacity and does not offer any brokerage solutions.	Same as a Financial Planner.
Fiduciary	A fiduciary advisor is one who is legally obligated to act in their clients’ best interests. Fiduciaries typically charge flat or percentage-based fees for their services. The term is often used in industry marketing to convey an elevated standard of duty to clients, when in fact, any advisor who provides clients with advice for a fee is bound by this standard. Certain advisors are generally held to a fiduciary standard when providing advisory services, while broker-dealers are subject to Regulation Best Interest when making recommendations. Different compensation structures may present varying considerations, and the most appropriate arrangement depends on a client’s individual circumstances.	See above for Financial Advisor, Financial Planner, or Fee-Based Financial Planner
Investment Adviser Representative (IAR)	The regulatory term for a registered advisor who works for an RIA. Many IARs do not use this as their title, preferring instead to call themselves Financial Advisors, Wealth Managers, or Financial Planners.	Clients of RIAs
Certified Financial Planner (CFP)	A Certified Financial Planner has received a professional certification from the CFP Board by meeting a set of rigorous requirements, including a comprehensive education curriculum on which they are tested, an extensive experience requirement, and dozens of hours of ongoing annual education. Since CFP is a designation rather than a job title, it is typically held by people in a Financial Advisor or Financial Planner role.	See above as most CFPs are Financial Advisors or Financial Planners.
Chartered Financial Analyst (CFA)	The CFA is generally considered the most rigorous and difficult to achieve of the financial designations. Candidates typically undergo 3-5 years of self-study and must pass three successive exams to earn the designation. The CFA curriculum is focused on investment analysis and portfolio management, making it most applicable to individuals in portfolio management roles (though many financial advisors hold the designation).	Depends on role. See above for Financial Advisor/Financial Planner or below for Portfolio Manager.
Portfolio Manager	Financial professionals who create and oversee investment portfolios, aiming to meet specific financial goals while managing risk. They research market trends, select assets, and execute trades in active or passive strategies. PMs can also be referred to as Asset Managers.	Financial Advisors, High-net-worth individuals, institutional investors, corporations, government entities, etc.

You may have noticed that many of these company and advisor types overlap significantly or are used interchangeably. Many of these financial terms are not legal or regulatory designations, so their usage is often a matter of personal or firm preference and vary considerably from one organization to another.

Feel free to reach out to me at Michael.Bennicelli@reveillewealth.com with any questions.

Frequently Asked Questions

What Questions Should I Ask Before Hiring a Financial Advisor?

Before hiring a financial advisor, ask whether they are a fiduciary, how they are paid, what services they provide, what types of clients they typically work with, what credentials they hold, and how they build financial plans or investment portfolios.

Is a Wealth Manager the Same as a Financial Planner?

Not always. A financial planner typically focuses on helping clients create a comprehensive financial plan, while a wealth manager may provide broader services that include investment management, retirement planning, tax coordination, estate planning, and business planning.

How Do I Know if a Financial Advisor Is Qualified?

You can evaluate a financial advisor by reviewing their credentials, registration status, experience, fee structure, services, fiduciary obligations, and disciplinary history. It is also important to understand how they are compensated and whether their planning approach fits your needs.

What Is AUM?

AUM stands for assets under management. It refers to the total amount of client assets that a financial firm or advisor manages. Some advisors charge a percentage of AUM as their advisory fee.

What Is the Difference Between Fee-Only and Fee-Based?

Fee-only advisors are compensated only by client-paid fees and do not receive commissions from selling financial products. Fee-based advisors may charge client fees and may also receive commissions or other compensation from certain products or transactions. Importantly, one is not necessarily superior to the other. Which one you choose will depend on your specific situation and needs.

What Is the Difference Between an RIA and a Financial Advisor?

An RIA is a registered firm, while a financial advisor is an individual professional who gives financial advice. Some financial advisors work for RIAs, while others work for broker-dealers, banks, insurance companies, or wealth management firms.

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Any opinions are those of Reveille Wealth Management and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional. Investing involves risk and you may incur a profit of loss regardless of strategy selected, including diversification and asset allocation. Prior to making an investment decision, please consult with your financial advisor about your individual situation.