Many people will interchangeably use these words. While they are experts in a similar line of work (helping people achieve their money goals and aspirations) their duties and responsibilities differ.
This article focuses on these two professionals, explaining their roles and differences in depth. By deciphering these two titles, clients can find the right professional for their desired services.
So, financial advisor vs. financial planner, who to pick?
What is a Financial Planner?
This is an expert who can help you come up with a holistic plan of action for your long-term money and wealth acquisition goals. They are skilled personnel that will offer personalized services such as:
- Helping clients with their budgets.
- Understanding money statements.
- Offering advice that you can execute to accomplish your saving goals for the long haul.
- Helping clients with retirement planning.
Generally, they are professionals that will manage your entire portfolio and guide you into achieving your monetary objectives from when you make your first income until retirement. They can be self-employed or be part of consulting firms and service providers.
What is a Financial Advisor?
This is a skilled expert in the finance industry that provides money-related advice. It is a general term that can be used to describe a number of people that can offer money help. For example, a broker and insurance agents fall under this job title, although their scope of work differs.
Some of their duties include:
- Wealth management.
- Offering money-saving advice.
- Tax planning.
- Advising clients on wise investment opportunities.
- Investing on behalf of their client.
How to differentiate between the two experts
While some of their roles may be similar, the difference between a financial planner and a financial advisor still exists.
Check this out:
Scope of work
A planner is more focused on building a thorough action plan for the long haul. Basically, their services are all-inclusive and detailed.
An advisor, on the other hand, is tasked with coming up with the right strategies to ensure clients achieve this plan. They will actively be involved in the execution of the strategies outlined by their colleagues.
While many professionals provide planning services in the finance industry, those that hold the CFP title are held in high esteem.
To attain the CFP certificate, a candidate must hold at least a bachelor’s degree and have not less than three years of experience relating to monetary planning. Being certified attests to their prowess and knowledge in advising clients on finance-related matters, allowing them to offer a wide range of fiduciary services.
However, this is not the case when it comes to their counterparts.
Since an advisor can be an umbrella term for numerous experts in the finance space, each of the professions that fall under it has its unique certifications.
For example, an investment management expert will need to have a Series 65 license and be SEC-registered while the Series 7 certification and FINRA registration would be perfect for a stockbroker. So, when looking for a professional to offer money advice, it’s vital that clients do due diligence and hire one with the right certifications, based on the services they need.
Which one should you pick?
Are you still undecided between a financial planner and a financial advisor?
To understand which of the two is ideal for you, you need to know your needs.
If you have a specific need, for instance, purchasing stocks, or want investment guidance, an advisor would be perfect. However, if you need more extensive help, for example, with handling your vast wealth or working out a retirement strategy, a planner would be of much assistance.
These are both experts that can leverage their expertise to help you tackle your money-related problems. They have their designated duties and their names shouldn’t be used interchangeably.
As such the importance of understanding their differences cannot be over-emphasized. It is by doing so that clients can find an adept finance guru to steer them on the path of success.
Interactive Wealth Advisors is an Oregon wealth management firm that can help you create an exhaustive plan to secure your future.
Contact us today for more information.