Financial Planner vs. Advisor

FINANCIAL PLANNER VS. FINANCIAL ADVISOR: IS THERE A DIFFERENCE?

A good plan is the first step to achieve any goal. A finance professional is required if you want to get your finances together and start working on a financial plan. However, the difference between a financial planner and an advisor may not be clear and may prevent you from taking a step towards financial independence. To help you start your financial journey, we define both these roles and break down the differences.

FINANCIAL ADVISOR:

Financial advisors are professionals who provide their clients with advice and direction about the project in which they want to invest in. Their roles and duties include:

• Looking into the clients’ financial goals and determine the investment that matches the best.
• Recommending investments that match best with clients’ goals and preferences.
• Discussing investment types and potential risks involved with the client.
• Observing clients’ accounts and suggest changes as required.
• Researching investment opportunities.

FINANCIAL PLANNER:

A financial planner is a type of financial advisor who is mainly focused to meet the long-term goals of their clients. Compared to a financial advisor, a financial planner dives deeper into their client’s situation and financial goals and creates a holistic financial plan to help them reach these goals. This holistic plan often includes risk management and investment, insurance, tax, retirement and estate planning. To create this financial plan, a financial planner must have a specialty in estate planning, investment, taxes, retirement and must hold a license in Certified Investment Management Analyst, Certified Financial Planner, Chartered Financial Analyst, and Chartered Financial Consultant. With these certifications, a financial planner has more experience and knowledge in creating a financial plan than a financial advisor.

ROLE AND DUTIES

Financial planner duties are as follows:

• Determine clients’ financial condition from a more holistic perspective except simply managing investments.
• Manage clients’ investments in a wider context than how the investments fit best in their complete financial portrait.
• Provide clients with services such as retirement, taxes, estate planning, and investment management.
• Plan for expenses, education, retirement, and other life events with the clients.

AREAS A FINANCIAL PLANNER COVERS:

The areas which are covered by financial planners are as follows:

• CASH FLOW MANAGEMENT

This area covers the client’s expenses in their current and future and involves the running of income and out expenses. The financial planner plans strategies to ensure sufficient income for their client to cover expenses and save for their financial goals.

• INSURANCE PLANNING

Such planning plays a role in the safety net and investment clients make it themselves. Additionally, they have a large coverage of life, vehicle needs, current health which clients have to change their policies as per the circumstances changes.

• TAX PLANNING

Tax planning includes investment decisions to help clients optimize their return on investments while lowering the amount paid in taxes.

• RETIREMENT PLANNING

Retirement planning helps clients to begin planning about their retirement and the future of their family. With a financial plan, the client will reach their financial goals and retire without having to worry about having a job for financial support.

What are the benefits of working with a financial planner compared to a financial advisor?

Overall, a financial planner provides a more in-depth and holistic strategy than a financial advisor by optimizing all parts of the client’s financial plan and help their clients reach their financial goals. If you want to learn more about how we can help you reach your financial goals, book our complimentary 30-minute consultation session with us!

Author: Rachel Maisen, We Buy California Houses for Cash

Editor: Team Jackie Porter