Consumers are presented with a broad spectrum of financial professionals, all of whom may be vying for their business. “Financial advisor” and “financial planner” are popular titles for individuals who help consumers manage their money.
Financial Planner vs. Financial Advisor: An Overview
In most cases, a consumer who seeks help managing their money will receive that help from a financial advisor of some sort.
When choosing a financial planner, it’s important to understand the financial planning landscape. According to the Financial Industry Regulatory Authority (FINRA), almost anyone can claim to be a financial planner and might come from many different backgrounds.1 Financial planners might be brokers or investment advisors, insurance agents, practicing accountants, or individuals with no financial credentials. That is why consumers must perform their due diligence before turning their money over to any sort of financial advisor. Here are some differences between the two terms.
Financial Planner
A financial planner is a professional who helps individuals and organizations create a strategy to meet long-term financial goals. Typically, a financial planner will take a holistic approach to finance, helping to map out a plan for budgeting, saving, investing, and retirement planning. Although many financial planners assist individual clients through their own practice, they might also work for a bank, wealth management firm, or non-profit organization.
The planner might have a specialty in investments, taxes, retirement, and/or estate planning. Further, the financial planner may hold various licenses or designations, such as Certified Financial Planner (CFP), Chartered Financial Analyst (CFA), Chartered Financial Consultant (ChFC), or Certified Investment Management Analyst (CIMA), among others. To obtain each of these licensures, the financial planner must complete a different set of education, examination, and work history requirements.