Financial Advisor vs. Financial Planner
You’ve decided that you need some help improving your financial situation, but what’s the difference between a financial advisor and financial planner? These two terms are often used interchangeably, but there’s actually a big difference. I’m going to show you the difference between the two, so you can decide whether you need a financial advisor or a financial planner for your next big financial decision.
Before even considering the difference between a financial advisor and a financial planner, you might be wondering about the difference between a financial advisor and a financial adviser. Basically, both are simple spelling differences, meaning someone who gives advice. However, according to the Ontario Securities Commission, an “adviser” is a legal term given to a person or company that is registered to give advice solely on investing in securities.
Now that we’ve solved that issue, let’s dive deeper into the meaning of a financial advisor. Generally speaking, a “financial advisor” is an umbrella term used to describe a variety of different financial professions. A financial planner actually fits under this term as a type of financial advisor. In Ontario, anyone can call themselves a financial advisor or a financial planner. I’ll explain how to decide between the two in a minute.
There are many different types of financial advisors. A customer service representative at a bank is considered a financial advisor. There are also personal bankers and mutual fund representatives. Depending on your needs, you might seek advice from an investment representative or adviser. Insurance advisors and financial planners all fit under this category of financial advisors in Canada.
A financial planner has a simple role. They help you create a plan to reach your long-term financial goals.
So, we know that a financial planner is a type of financial advisor, but what does a financial planner do? A financial planner has a simple role. They help you create a plan to reach your long-term financial goals. Some financial planners may have a specific designation. They might be a Certified Financial Planner, a Personal Financial Planner, or a Registered Financial Planner. No matter their distinction, a financial planner’s role is to help you plan how to use your money.
Because a financial planner’s role is limited, they may only help you in a few areas when it comes to your finances. They might work with you to create a monthly budget. This will help you manage your expenses, so you can learn where your paycheque should be going each month. They could help you plan for your retirement, or a financial planner might determine ways for you to save on your taxes. Some financial planners may only specialize in one of these areas; whereas, other financial planners might be experienced in all three.
A financial advisor with a broad range of skills can do everything a financial planner does and more.
Should I Choose a Financial Advisor or a Financial Planner?
There are many factors to consider when deciding whether to go with a financial advisor or a financial planner. If you only want some basic help in planning your finances—like creating a budget, then a financial planner might be your choice. But if you want someone who can offer advice in a variety of financial situations, then you’ll want to choose a financial advisor with a diverse background.
A financial advisor with a broad range of skills can do everything a financial planner does and more. They could help you with creating a budget, but they could also help you invest in the right mutual funds to prepare you for your ideal retirement. They might even have a background in insurance advising to help protect your family from all sorts of mishaps.
A good financial advisor will assess your current situation. They will work with you to determine your present and future goals. They will also give you advice on the financial products and services that are right for you and your family. Plus, they will review and update your investments and financial situation on a consistent basis.
No matter what type of financial professional you choose, you want to make sure they are qualified to help with your situation. Ask them about their education and track record when working with clients. Always make sure to learn about their areas of expertise. For a complete guide to choosing the right financial advisor, take a look at our blog on choosing the right financial advisor in Canada.
Is The Financial Diva the Right Fit for Me?
I like to think of myself as a financial coach rather than a financial advisor. This is because I help you become financially confident. I am a highly qualified coach because I am licensed in all areas of insurance, and I have my Fraternal Insurance Counselor’s certification. I build a fence around my clients to assist you with almost all of your financial needs—from budgets to insurance and investments.
Summary of Financial Advisors vs. Financial Planners
Now you know the most important differences between a financial advisor and a financial planner. A financial planner is a type of financial advisor, but they focus on a very limited area. A financial advisor might have a larger skill set than a financial planner, but you need to ask the right questions to determine whether they are a good fit for you and your family. If you’re still unsure how to choose your financial advisor, take a look at our blog, “How to Choose a Financial Advisor in Canada.”
Contact me today to learn why I’m the perfect financial advisor and coach for you!