The terms “wealth management” and “financial planning” are often used interchangeably when discussing finances, but they’re actually two distinct services with different purposes. Learn how to decode these differences so you can make well-informed financial decisions that suit your needs both now and well into the future.

What Is Military Wealth Management?

Wealth management takes a holistic, future-focused approach to managing your finances. A professional wealth manager will work with you to grow and preserve your wealth over the long term.

Advantages of Military Wealth Management

A few of the more significant benefits of military wealth management include:

• The chance to partner with a team of experts: Working with a team of financial professionals gives you access to specialized advice on topics such as military benefits, tax strategies, and investment options, and helps you avoid common financial missteps.
• A comprehensive approach to managing your finances: Wealth management considers your full financial picture, including housing, retirement, education benefits, and insurance. This helps you create a stable foundation, whether you're on active duty, transitioning, or a Veteran.
• A focus on long-term growth: The goal of wealth management is to build wealth over time. Military wealth managers emphasize long-term investment strategies and retirement planning, so you can grow and protect your assets into retirement and beyond.
• The ability to customize a plan to meet your specific needs: Every servicemember’s financial situation is different. A personalized wealth management plan ensures your specific goals, risk tolerance, and timeline are taken into careful consideration.

Key Aspects of Military Wealth Management

You can expect a wealth management advisor to offer:

• Familiarity with military pay structures (e.g., BAH, BAS, combat pay): By understanding how military compensation works, your advisor can  help you build an accurate budget, maximize your entitlements, and build long-term wealth.
• Knowledge of military retirement systems (e.g., Blended Retirement System): The Blended Retirement System (BRS) combines a pension with matching contributions to the Thrift Savings Plan (TSP), similar to a civilian 401(k). Your advisor can help you understand how these systems work so  you can make informed decisions about your career and savings.
• Expertise in VA benefits and survivor benefits: VA benefits and survivor benefits, such as the Survivor Benefit Plan (SBP), will play a significant role in protecting your family's financial future after service or in the event of loss.
• Guidance on TSP (Thrift Savings Plan) options: Financial guidance on TSP can help you choose the right fund mix, understand contribution matching under BRS, and use the plan to build retirement savings effectively.
• PCS (Permanent Change of Station) financial planning: Each PCS move brings potential costs and benefits. The right wealth management strategies include any reimbursement eligibility, savings for out-of-pocket expenses, and decisions about housing and budgeting in a new duty station.
• Deployment savings strategies and tax exclusions: Deployment often involves tax-exempt income and additional compensation. Wealth management lets you boost savings, reduce taxable income, and capitalize on temporary financial advantages.

What Is Military Financial Planning

Financial planning is creating an initial roadmap for achieving your financial goals. It involves setting realistic goals, such as saving for a home or paying down debt, then assessing your current financial situation to develop a plan to achieve those goals.

Advantages of Military Financial Planning

Financial planning is most beneficial for individuals who have a specific goal in mind and may require assistance in achieving it. A few advantages of financial planning include:

• Lower fees than wealth management: Military financial planning typically involves fewer management layers and product costs.
• More control over investments: Financial planning empowers servicemembers to make informed choices about various savings vehicles, retirement accounts, and risk tolerance to align with their career stages or military benefits.
• Improved financial health and awareness: With a focused financial plan, you can track your spending, identify areas for savings, and build habits that support long-term stability, even through the unpredictable nature of military life.
• The ability to set financial goals and benchmark your progress: Financial planning helps you create specific, measurable goals and provides a framework to monitor your progress over time.

Key Aspects of Military Financial Planning

You can expect a financial planning expert to offer:

• Guidance on how to budget and save: Creating and following a budget helps servicemembers manage income, avoid debt, and prepare for changes such as deployments or PCS moves. A savings cushion gives you financial peace of mind during uncertain times. 
• Life insurance coverage recommendations: Life insurance provides financial protection for military families by making sure that loved ones are financially supported in the event of a tragedy.
• Investment advice: Servicemembers benefit from tailored investment guidance that helps them choose the right accounts, avoid scams, and plan for long-term goals while accounting for life in and after the military.
• Retirement planning (401(k)s, IRAs): Contributing to retirement accounts such as 401(k)s or IRAs early in a military career maximizes compounding and supports your post-service life. These accounts often complement military retirement benefits.
• Tax planning: Servicemembers face special tax situations, such as exclusions during deployments or deductions for moving expenses. Proper tax planning helps reduce liabilities, maximize refunds, and align with overall financial goals.

Comparing Military Wealth Management vs. Financial Planning

Wise financial decision-making involves knowing when to apply each approach to optimize financial outcomes, particularly during transitions or retirement.

When comparing financial services, start by aligning your strategy with your military lifestyle. Individuals with complex financial needs or a higher net worth may prefer wealth management services. Junior servicemembers or those just starting out may benefit more from targeted financial planning tailored to their specific goals.

Let’s take a more comprehensive look at the difference between financial planning and wealth management in terms of your needs and goals.

Holistic vs. Specific Approach

Wealth management is a holistic approach that considers all aspects of your financial life. It often combines investment management, tax optimization, real estate strategy, and intergenerational estate planning to create a full-spectrum strategy.

Financial planning is focused on helping you achieve specific financial goals. It may include creating a budget for a PCS move, optimizing TSP contributions, or navigating VA Loan eligibility. It's about creating a financial roadmap that supports mission readiness and long-term success.

Long-Term View vs. Short-Term Goals

Wealth management focuses on preserving and growing your wealth over the long term. It includes strategies such as portfolio diversification beyond the TSP, Roth IRA conversions after separation, or charitable giving through donor-advised funds. Military wealth managers may also coordinate estate documents and tax strategies for high-ranking officers, retirees, or those with generational planning needs.

Financial planning typically focuses on short-term goals, such as saving for a down payment on a home using BAH or building an emergency fund before deployment. The aim is to improve immediate financial stability and create future timelines, such as tracking your 20-year retirement milestone or managing deployment bonuses wisely.

Active vs. Passive

Wealth management is an ongoing process that involves the active monitoring and management of your finances. Advisors may directly manage investment accounts, proactively rebalance portfolios, or assist in purchasing real estate. They remain engaged and often use tools such as Monte Carlo simulations or tax-loss harvesting for high-net-worth clients.

Financial planning is a process that typically occurs once or twice a year. Planners help establish the structure, such as budget spreadsheets, debt payoff plans, or TSP allocations, but execution remains in your hands. This promotes financial literacy and self-sufficiency.

Insurance and Survivor Needs

Military-specific insurance options, such as Servicemembers’ Group Life Insurance (SGLI), Veterans’ Group Life Insurance (VGLI), and the Survivor Benefit Plan (SBP), address coverage in ways that civilian term or whole life policies often do not. SGLI offers low-cost life insurance during active duty, while SBP ensures a portion of retirement pay continues for a spouse or dependent after death.

Wealth management can involve adding civilian policies, such as whole life insurance, to supplement SGLI after separation or utilizing permanent insurance for estate tax mitigation.

Financial planning addresses potential coverage gaps during major life changes, such as updating beneficiaries after marriage or converting SGLI to VGLI when transitioning out of the military.

Which Is Best for You?

Both wealth management and financial planning serve important roles in your financial future. Wealth management ensures your long-term assets are preserved and positioned for growth, while financial planning creates a day-to-day plan to meet your immediate and mid-range needs. You don’t necessarily need to choose one or the other. Most military families benefit from a combination tailored to their stage of service or transition to civilian life.

Life insurance aligns with both approaches. In wealth management, it can be used strategically to create liquidity for estate planning, cover future tax burdens, or protect business interests. In a financial planning context, it serves as a risk-management tool, safeguarding your family’s ability to pay off debt, replace income, or manage ongoing expenses in your absence.

What to Look for in a Financial Planner or a Wealth Manager

For servicemembers and military families, choosing a financial planner or wealth manager should go beyond basic qualifications. You need someone who understands military-specific benefits, pay structures, and the transitional challenges of service life.

Here are some key factors to evaluate when selecting a financial planner or wealth manager:

Credentials

A qualified financial advisor should hold recognized certifications such as Certified Financial Planner (CFP®) or Wealth Management Certified Professional (WMCP®). These credentials indicate that the advisor has undergone rigorous training and adheres to the highest ethical standards. For military clients, these designations should be paired with education or training in military compensation systems, survivor benefits, and the TSP.

Experience

Look for someone who has worked with other servicemembers, understands VA benefits, and has guided clients through military transitions such as PCS moves or retirement from active duty. Hands-on experience navigating complex military pay and retirement structures means they understand what your  needs are now and what they may become down the road.

Fees

Understand how your advisor gets paid. Some charge a flat rate or hourly fee, while others earn commissions based on the products they sell. Military families, especially those on a tight budget, should look for a transparent, low-fee structure with no hidden costs. 

Avoid advisors who push products that may not serve your best interest just to earn commissions.

Military Expertise

A financial professional specializing in the military will understand concepts such as BAH, deployment pay, combat zone tax exclusions, and the complexities of military retirement systems. They’re also better equipped to offer advice tailored to your service timeline and benefits. 

Reputation

Before committing, research the advisor’s reputation. Look for online reviews, third-party ratings, and testimonials from other servicemembers. A trusted advisor should be transparent, communicative, and have a track record of helping military families achieve financial security. Consider asking your chain of command, Veterans groups, or a base financial counselor for recommendations.

Military Financial Resources

Through Armed Forces Mutual, you can connect with professionals who have extensive military financial expertise. AAFMAA Wealth Management & Trust LLC Relationship Managers work exclusively with military servicemembers, Veterans, and families to help them build wealth and preserve their legacy. 

Life insurance is also a sound way to ensure your finances work in your favor to protect your loved ones’ future. Consider your options and apply today.

Stay up to date with the latest information and news on military benefits, personal finance, life insurance, free resources, and more by becoming an Armed Forces Mutual Subscriber with full access to the content in our Learning Hub.

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This article was originally published October 8, 2020.