If you have ever considered a financial planner or financial advisor, you probably quickly realized there is a very broad range of professionals to choose from. Financial planner vs financial advisor: both are popular titles for an individual who helps you manage your money. So, are they the same or different?
First, every financial planner is also a type of financial advisor. However, not every financial advisor is a financial planner. The National Association of Personal Financial Advisors claims that there are over 100 certifications available that a financial advisor may attain.
Financial Planner vs Financial Advisor
In most cases, an individual seeking help with money management will hire some sort of financial advisor. When it comes to choosing who to hire, it is important to understand the titles and what they mean.
According to the Financial Industry Regulatory Authority, nearly anyone can claim to be a financial planner. They might be brokers, insurance agents, investment advisors, practicing accountants and even have no financial credentials. Therefore, you must do your research before handing your money to any financial advisor.
[Related: Good Questions to Ask Your Financial Advisor]
This is one type of financial advisor. They help companies and individuals create a program to help them achieve long term financial goals. These individuals might have a specialty in investments, retirement, taxes, and/or estate planning.
As we mentioned earlier, they may hold any number of licenses or designations such as Certified Financial Planner, Chartered Financial Analyst, Certified Investment Management Analysts, and more.
The financial panner must complete education, examination, and work history requirements to obtain a license in these areas.
This is a broad term for any professional who helps manage your money. In exchange for payment, the advisor helps you with any number of money related tasks. This might include making investments, creating tax and estate plans, brokering the sale and purchase of stocks and funds and more. In order to work in the public, the advisor must hold a Series 65 license.
Depending on the services they provide, they may hold more credentials. As a general term, financial advisor includes subsets of the financial advisor group like stockbrokers, money managers, estate planners, insurance agents, stockbrokers, bankers and more. Here are our tips for finding the best financial advisor.
Most people who need help with their finances will choose a financial planner, which is a more specific type of financial advisor. Choosing which “type” of financial planner you hire will require research and investigation.
The bottom line is this: Before you hire a planner to help with your finances, you need to know what you are paying for. Question the professional’s training, qualifications, fee structure, and licenses.
Understand which services they will be providing and ensure that this is in line with your needs and goals. Lastly, check the disciplinary record and references for the planner to ensure you will receive quality guidance.
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