Are you looking for help with your finances and aren’t sure of the differences between a financial planner and a financial adviser? You aren’t alone!
Often, the terms are used interchangeably, but there are differences between financial planners and advisers, mainly down to the services they offer. You must understand these differences to make informed decisions about your finances and new financial goals. Today, we walk you through the roles of financial planners and advisers, looking closely at their differences to see which is the right option for you.
What is a financial planner?
A financial planner is a professional who helps organisations and individuals achieve their financial goals. Financial planners focus on the bigger picture goals. They are typically involved in creating plans and overseeing them to ensure you achieve your objectives, whether these are investment, retirement, or other financial goals.
Most financial planners will specialise in a specific area of expertise, such as estate planning, taxes, retirement planning, or investment planning. In these specialised areas, you can expect to tap into a wealth of knowledge that helps to create unique plans to ensure you meet your goals. A financial planner’s roles and responsibilities can vary depending on their specialised area and the services they offer, but typically ,you can expect:
Financial analysis – assessing your financial health and supporting how you can improve this
Goal setting – helping you decide short-term and long-term financial goals, like saving for retirement or buying your first home
Insurance planning – helping you understand how much insurance you need
Investment advice – ensuring your money goes further and is protected when invested
Tax optimisation – helping you maximise tax deductions, manage investments wisely, and learn about the tax implications of your financial decisions
Qualifications needed for a financial planner
Financial planners will be certified by the Certified Financial Planner Board of Standards (CFP Board), reassuring you they have the skills and knowledge needed to help you achieve your goals. Financial planners should have the CFP designation listed in their credentials, and will typically also have educational qualifications. Many will have an undergraduate degree in accounting, financial planning, or a hybrid of the two.
Some financial planners choose to return to education and gain a master’s degree, too, which can allow them to specialise and deepen their knowledge of financial planning. Typically, this master’s will be in financial planning or a specialised financial management course.
Salary expectations for a financial planner
Salary expectations for a financial planner will vary depending on the area of expertise they specialise in, whether they work independently or for a larger financial planning firm, and the length of their experience. Financial planners typically earn a salary ranging from $115,000 to $145,000 on average.
Those working independently may earn higher or lower salaries, depending on the rate they charge and the number of clients they have at any given time.
Who should become a financial planner?
Financial planners will need to have excellent communication skills, as they work closely with clients to understand their goals. The role is better suited to those who enjoy close and personal relationships with clients that last for years. Many financial planners work with their clients for years, making it an ideal fit for those seeking a long-term role.
What is a financial adviser?
A financial advisor is a professional who assists clients with wide range of financial-related tasks. Financial advisors work in a wide range of sectors too, including stockbroking, wealth management, estate planning, banking, and insurance. The responsibilities will vary depending on the role, but they can include:
Brokering the abseiling and buying of stocks and funds
Developing tax and estate plans
Managing investments
Provide clients with investment suggestions
Providing advice about saving money
Providing insurance advice
Qualifications needed for a financial advisor
A financial adviser typically holds an undergraduate degree in a field related to financial advising, banking, or accounting. They might also have a master’s degree if they have chosen to deepen their knowledge or move into a specialised field.
Some financial advisors may opt to pursue a Master of Business Administration (MBA), which provides a deeper knowledge and understanding of financial management and economics, making them more attractive to employers.
Salary expectations for a financial advisor
The salary for a financial advisor tends to be lower than that of a financial planner. Many advisors will earn a wage through fees or commissions, making it difficult to provide an accurate salary expectation. Their salaries will also vary depending on whether they work independently or as part of a larger organisation.
Who should become a financial advisor?
Financial advisors will interact with clients, but in an investment-centred capacity. It is a good choice for anyone interested in stocks and investments. Financial advisors work with clients in both a long-term and short-term capacity.
What is the difference between a financial planner and a financial adviser?
The biggest difference between a financial planner and an adviser is that a financial planner will work in specific areas, helping you to achieve financial goals. In contrast, an adviser will work more on stocks and investments, or in a general finance capacity. Many companies use the term interchangeably, so it is essential to determine what services they offer to ensure they are right for you. Companies like Solace Financial offer dedicated financial planners and advisers to help achieve your goals, regardless of what they may be. Contact them to find a financial adviser today.
Read more:
Financial planner vs financial adviser: what’s the difference?
