If you want to achieve something. You have to make a proper goal in your mind first before executing further and you need to be a financial planner. To reach your desired goal. You need a good strategy, a good plan. And when it comes to achieving your financial goals. You require a finance professional. Finance is a vast industry. where you need someone. who can guide you through every step? And helps you in attaining your financial goals? To make your mark in the field of finance. And for the profit of your organization. You either need the help of a Financial Planner or Financial Advisor. Although both the job titles are used interchangeably. There is a huge difference between the role and responsibilities of a Financial planner vs Financial advisor.
In layman’s terms, a financial planner is one who takes care of clients’ financial goals. Whereas a financial advisor is a broader term used for the professional. who focuses on managing the investments of the clients. In many countries, financial planners and financial advisors are the two different titles having their own roles and responsibilities. Whereas in countries like UK financial advisors call themselves financial planners regardless of the fact.Whether they deliver financial planning services or not.
So, in today’s article, I am going to tell you the roles and responsibilities. The key differences between a financial advisor vs financial planner. So let’s start with a brief introduction.
A financial planner is a professional who helps organizations and individuals in making strategies and programs to meet long-term financial goals. A finance planner looks at a bigger picture using various financial approaches to create a strategy and make it happen. The role of a financial planner is more comprehensive and holistic as. They are involved much in creating a financial landscape. That provides a roadmap for the future aspects of an organization. To become a professional financial planner. You need to have a bachelor’s degree in economics, accounts, or finance plus a minimum of three years of experience in one of the disciplines. While choosing a financial planner for your business. You must provide them all the details like total capital. Past history of the company Current performance. And other crucial details related to your business
Roles and Responsibilities of a Financial Planner
- A financial planner helps and assists clients in making budgets, controls expenditures, and establishing various objectives for saving and accumulating wealth within an organization
- Accesses past and present records of the clients
- Maintains a healthy relationship with the clients by keeping them updated regarding various changes. That may affect their finances
- They also act as a middleman between clients and other professionals.
- Assisting clients in various legal, estate management, tax returns, and other such financial tasks.
Financial Advisors are the professionals. Who helps you in managing your day-to-day finances. They offer advice to their clients and provide them a direction to invest their money at the right place. They also help in purchasing various stocks and funds and also create detailed estate and tax plans. One specialty of financial advisors is that in exchange for a fee. They assist their clients in a number of money-related matters. Such as suggestions related to investments, buying and selling of stocks, creating comprehensive plans related to saving and consuming of money, and much more. Financial advisors working with the public are bound to have “Series 65 and 66 License”. However, these people can be stockbrokers, insurance agents, money managers, bankers, etc with lots of experience in the field of Financing.
Roles and Responsibilities of a Financial Advisor
They manage the finance of their clients and help in determining the best matches for achieving the long-term financial goal updates and informs. Its clients about different investment opportunities and the risks involved.
Monitors finances and accounts of its clients and makes changes if needed.
Understands the retirement goals of its clients. And finds the best way to turn those goals into reality.
They also help in debts management by prioritizing. What a client should do. How the money needs to be invested.
Difference between Financial Planner Vs Financial Advisor
The main difference between a financial planner vs financial advisor is that a financial planner focuses on your objectives and long-term goals. whereas a financial advisor stresses more on managing money and investment-related matters.
Financial planners usually try to maintain a long-term relationship with the investors. whereas financial advisors have relationships with the clients only. They have nothing to do with the investors.
For becoming a financial professional. You must have a bachelor’s degree plus certification in CFP (certified financial planner) with a minimum of three years of experience in the field of financing. On the other hand, for becoming a financial advisor. You need a bachelor’s degree plus a 65,66 security license.
According to a report by Payscale. . Whereas, the estimated annual salary of financial advisors is around $87,000 according to BLS figures. These figures are enough to prove that. There is a huge difference between the working of a Financial Planner vs financial advisor
A financial planner generally charges a percentage for managing someone’s investments. And mostly charge on an hourly basis. Whereas, financial advisors compensate their cut through a commission. It could be fee-based or even flat fee based on the requirements of the clients.
A financial planner may hold several meetings. That can take up to several days or months to identify the requirements of the clients. whereas, a financial advisor can solve. And identify the demands of the clients in one or two meetings.
In a nutshell, we can say both financial planners are more specific types of financial advisors .who look at the broader picture to determine. The long-term goals of an organization. However, both the job titles have their own roles and responsibilities depending on the requirements of the clients.
These were some of the main key differences between Financial Planners vs Financial Advisors.