Many people are not sure what the difference is between a financial advisor and a financial planner. In this article, we will discuss the different responsibilities of each as well as their roles in helping clients reach their financial goals. For those who may be unsure about which type of professional they should consult with, this article can help you make an informed decision before hiring one.
A financial planner is also considered a financial advisor, but not necessarily the other way around. A financial planner typically has a degree in financial planning, relevant experience, or operated in a related field, while a financial advisor can have any number of degrees or designations.
One key difference between these two professions is that financial planners if operating in a fiduciary capacity must act in the best interest of their clients at all times, whereas financial advisors do not have such a legal obligation.
What is a Financial Planner?
A financial planner is a professional who helps people create and manage their financial plans. They can provide advice on investments, insurance, retirement planning, and more. Financial planners typically have a degree in finance or economics, or relative experience and many also have certification from the Certified Financial Planner Board of Standards (CFP) or other designation groups.
What Does a Planner Do?
Financial planners are responsible for developing comprehensive financial plans for their clients. This includes creating budgets, helping to invest money wisely, and recommending appropriate insurance policies. In addition to these tasks, financial planners also often offer guidance on reducing debt, college savings, and estate planning.
How Can I Find a Good Financial Planner?
When looking for a financial planner it is important to consider several factors. First, make sure that the planner is experienced in planning and has been through multiple market cycles, not just the most recent bull market. Second, ask friends and family members for referrals.
Finally, be sure to interview potential planners and ask them about their experience and approach to financial planning.
What is a Financial Advisor?
A financial advisor is a professional who provides investment advice to clients. Advisors typically have a degree in finance or economics, and many also have certification from organizations such as the (CPWA) Certified Private Wealth Advisor, Certified Investment Management Analyst (CIMA), or Chartered Financial Analyst (CFA).
What Does a Financial Advisor Do?
Financial advisors are responsible for helping clients invest money wisely and reach their financial goals. Advisors typically work with individual investors as well as businesses and financial institutions. In addition to recommending investments, financial advisors often help with tax planning and retirement saving as well.
How Can I Find a Good Financial Advisor?
When looking for a financial advisor it is important to consider several factors such as their education, experience, and depth of financial specialists. It is also advisable you check out their investment strategies and fee structures before hiring.
Finally, be sure that they are licensed or registered by your state securities authority so that if something goes wrong you will have legal recourse against them.
What is the Difference?
A financial planner typically helps people create comprehensive financial plans while a financial advisor can provide advice on investing money wisely within these plans. If you can find a firm that provides both or a team of specialists, you’ve got the right group.
Financial planners have more of a focus on comprehensive financial planning, but many times will not assist in the execution of the plan while financial advisors typically specialize in the execution and implementation of strategies related to investment advice. When looking for one of these professionals it is important to consider what you need the most help with so that you can find the best person for your needs.
In conclusion, financial advisors and planners both have important roles to play in helping people reach their financial goals. By understanding the difference between a financial planner and an advisor, you can make an informed decision on who to work with.
If you are considering hiring a wealth management firm, please contact Prevail today to meet with an advisor.