Posted by Gerald J. Turner –
At first glance, the terms “financial advisor” and “financial planner” may seem interchangeable. However, when seeking the advice of a financial professional, it’s crucial to know which type of expert you need.
Here is a quick overview of each professional, what they offer, and which one you need:
A financial advisor is a generic, broad term for a person who can help you manage your finances. Advisors can help with managing your investments, buying or selling stocks, or give general tax or budgeting advice. Advisors should hold a Series 65 license which is earned by passing the Uniform Investment Adviser Law Exam. This test covers legal issues, regulations, ethics and fiduciary duties, as well as portfolio management best practices and strategies. However, the National Association of Personal Financial Advisors, claim there are more than 100 different certifications available that a financial advisor can receive.
Financial planners are a subset of financial advisors who can help you create a long-term plan for your financial future. Their job is to give individuals a clear, comprehensive, actionable financial plan. These professionals may have specialized training in investments, tax topics, or retirement plans. There are several types of credentials that a planner might have earned. These could include a “Certified Financial Planner” designation, a “Chartered Financial Analyst,” “Chartered Financial Consultant or a “Certified Investment Management Analyst.”
So what’s the difference?
Think of it as a diagram: every financial planner is also a financial advisor, but not every financial advisor is a financial planner.
It’s also important to point out that those who are labeled as generic “financial advisors” may also be out to sell you a particular product, like an investment portfolio or an insurance policy. A financial planner is paid to provide a customized plan that will help you achieve your specific goals.Beware of legal advice. Because financial planners and advisors help individuals plan for the future, they may be tempted to give advice about estate planning. However, it is important to remember that most of these financial experts are not attorneys and that their legal advice cannot replace that of a licensed attorney.
Always start with referrals. As with most professional services, it is best to seek recommendations from people you know and trust. The best professionals often get their business through word of mouth.
We specialize in educating and helping you protect what you have for the people you love the most. Contact us so you can learn more about how we can help you and your family.