When you need financial advice it is natural to want to see a professional. After all, they are qualified and have the experience you need to make the right decision. However, when you start looking for a professional you’ll instantly note there are experts in financial planning and there are also financial advisors and they don’t do the same job.
It is important to note that every financial planner is a type of financial advisor. But, every financial planner isn’t necessarily a financial advisor!
The Role Of A Financial Planner
A financial planner’s role is to help people or businesses understand their current finances and find ways to improve them. That means they will help create a budget, offer advice on retirement planning, and help you select the best savings and investment opportunities.
In some cases, a financial planner will work within a bank or wealth management firm. But, in the majority of cases, they are independent and this makes it easier to trust their opinion.
It is worth noting that many financial planners specializer in specific financial instruments, such as:
- Estate planning
They will also need to reach the approved level by the Australian government. That means a bachelor degree or higher, at least one year of supervised experience, and they need to pass the exam set by the Financial Standards and Ethics Authority (FASES).
If the financial planner has specialized then they will need to pass an additional exam in each of the specialities.
A financial advisor will help you to manage your money. The key difference is that they won’t just offer a plan to help you improve your financial situation, they will work with you to make the plan, and the dream, come true.
Financial advisors will manage your investments for you, monitor stocks and shares and move money accordingly, and they can even buy and sell shares, stocks, and funds to help your money work as hard as possible for you.
In short, a financial advisor is much more hands-on when it comes to building your wealth. Of course, they will need to be paid.
In many cases the financial advisor will offer a hand in every part of your finances, including investments, life insurance, real estate, and they may even offer an accounting service.
Deciding Between The Two
It can be difficult to know which financial expert you should use. The best approach is to consider whether you are simply after advice, which the planner can help with, or if you want your financial consultant to handle some of the issues for you. In this case, you are better off with a financial advisor.
However, before you sign up, make sure you understand what they are getting paid and how much they charge. Some charge for every adjustment to your file, others charge a set annual fee. You’ll need to investigate which is better for you.
Remember to have a list of questions when selecting a financial planner or advisor, this will help to ensure you choose the one you are most comfortable with.