Paul David Tripp explains the difference between insight and application, or knowledge and wisdom, and why that matters for personal ministry:
Most of us are tempted to think that change has taken place before it actually has. We confuse growth in knowledge and insight with genuine life change. But insight is not change and knowledge should not be confused with practical, active, biblical wisdom. In fourteen years of seminary teaching, I have met many brilliant, theologically astute students who were incredibly immature in their everyday life. There was often a huge gap between their confessional and functional theology. Students who could articulate the sovereignty of God could be overcome with worry. Students who could expound on the glory of God would dominate classroom discussions for the sake of their own egos. I have counseled students who could explain the biblical doctrine of progressive holiness while nurturing secret worlds of lust and sexual sin. I have seen many men who were months away from ministry who had not yet learned how to love people. Students who could explain the biblical teaching of God’s grace were harsh, judgmental legalists.
In short, we must not confuse insight and change. Insight is a beginning, a part of the whole, but it is not the whole. We do want people to see, know, and understand, but we also want them to apply that insight to their daily life. God opens our eyes so that, in seeing him we would follow him more closely. This means that personal ministry should not end too soon. If holiness is God’s goal, we must be willing to help others through the process of change.
For many people it is much easier to know what is wrong than how to change it. I may have confessed a selfish, idolatrous heart and seen its fruit in my relationship with my wife. But it will be harder for me to think clearly and creatively about how to repent and love her in specific ways. I may understand the major themes in Scripture, but I may not know how to use them in certain situations and relationships. We all need people to stand alongside us as we apply God’s Word to our lives. –Instruments in the Redeemer’s Hands, pp. 242-243
Soli Deo Gloria
The other thing I would say is that wisdom is divinely instilled while knowledge refers to our empirically/logically derived information set.