Financial Adviser vs Financial Planner: What’s the difference & who do you need?
Not sure whether you need a financial adviser or a financial planner?
This guide explains the key differences, what each expert does, and who is right for your financial needs.
What’s the difference between a financial adviser and financial planner? Everything you need to know
Managing your finances can sometimes feel like navigating through a maze. You know you need help, but should you turn to a financial adviser or a financial planner? And what’s the actual difference between the two?
I refer to myself as a financial adviser and a Chartered Financial Planner. This is because most people do not know what a financial planner is, but have heard of a financial adviser. But there are key differences.
Imagine planning a wedding. You might hire a decorator to handle the flowers and seating, but for a comprehensive plan by someone who takes care of the venue, catering, entertainment, and timeline, you’d hire a wedding planner. The same concept applies to finances. A financial planner is your financial "wedding planner," focusing on the big picture, while a financial adviser looks at the details, like investment options and retirement strategies.
In this blog, we’ll break down the roles of both professionals, explore the differences, and help you decide which one is right for you.
What is a financial adviser?
Consider, Rebecca, a 32-year-old graphic designer, who has just received a £10,000 bonus from her company. She didn’t know what to do with it, so she reached out to her financial adviser. After a quick chat, her adviser recommended investing the entire amount into stocks.
It sounded like a solid idea, but soon after, Rebecca realised that she needed more than just advice about investing. She needed a broader financial plan that covered her entire financial future that considered more than just an investment strategy and products. This is where the difference between a financial adviser and a financial planner becomes clear.
A financial adviser provides specific advice related to particular areas of your finances, such as investments, retirement plans, or insurance policies. They typically focus on short-term financial decisions and don’t look at the bigger picture.
Why you might need a financial adviser:
Expertise in specific areas: If you need help with something like investments or choosing the right pension, a financial adviser can provide tailored solutions.
Immediate concerns: Advisers typically focus on short-term financial decisions, whether it’s setting up a retirement account or finding tax-efficient investment opportunities.
The myth: Many people believe that financial advisers are only for the wealthy. However, advisers can help anyone who wants to get a handle on their finances, no matter their income.
What a financial adviser does:
They give you specific, actionable advice and recommendations. But if you want help with long-term goals or a complete financial strategy, you may need a financial planner.
What is a financial planner?
Now, let’s consider Dave and Julia, a young couple expecting their first child. Along with the excitement of becoming parents, they’re thinking about their long-term future. How do they save for their child’s education? Can they afford to retire early?
They decided to hire a financial planner, someone who could help them not just with their immediate needs, but with an entire strategy for their financial future. A financial planner takes a big-picture view of your finances and designs a comprehensive plan to meet your short-term and long-term goals.
If a financial adviser is a specialist, a financial planner is like a financial "architect," helping you create a roadmap for your future.
The case studies above are hypothetical and have been created for illustrative purposes only
Why you might need a financial planner:
Long-term planning: If you have goals like saving for retirement, paying off debt, or funding your child’s education, a financial planner can develop a holistic plan to help you achieve them.
Comprehensive strategy: A planner helps you manage your budget, reduce debt, optimise tax strategies, and plan your estate. They ensure that all areas of your finances are working together to help you achieve your goals.
The myth: Many people think that financial planners are only for high earners. The truth is that anyone with long-term goals can benefit from a planner’s guidance. It’s about creating a strategy, not just choosing financial products.
What a financial planner does:
They help you create a holistic financial plan that encompasses budgeting, tax planning, savings, investments, and estate management. A financial planner ensures that all your financial areas are aligned to meet your long-term goals.
Key differences between financial advisers and financial planners
At first glance, a financial adviser and a financial planner might sound like the same thing. After all, they both help with money, right? But the truth is, they focus on different areas, and knowing the difference can help you choose the right one for your needs.
A financial adviser is like a personal trainer for your money. They specialise in things like investments, pensions, and insurance. If you’ve got a lump sum of cash and you’re wondering where to invest it, or if you need help setting up a retirement plan, a financial adviser is the person to talk to. Their advice is often about growing your money generally, and they usually focus on specific areas and products rather than your overall financial health.
A financial planner, on the other hand, takes a much bigger-picture approach. Think of them like an architect for your financial future. They don’t just look at investments as they help you build a plan for your entire financial life. Whether you’re saving for a house, planning for retirement, managing debt, or figuring out how to pass on wealth to your kids, a financial planner will help you map it all out so that every part of your money is working towards your goals.
Another big difference? Qualifications. Financial advisers usually hold investment-related licences, which allow them to sell financial products. Financial planners, however, typically hold certifications such as being a Chartered Financial Planner, which involve much more training in overall financial management.
So, which one is right for you? If you just need help with investing or choosing the right financial products, a financial adviser is probably enough. But if you want someone to help you plan your financial future holistically, a financial planner is the way to go.
Financial planner qualifications in the UK
Not just anyone can be a financial planner. In the UK, you should look for someone with credible qualifications, like the Chartered Financial Planner designation. These qualifications demonstrate that the planner has passed rigorous exams and follows high ethical standards. You can read more here.
Just like you'd trust a certified builder to construct your home, you should trust a qualified planner to manage your finances. It's also essential to verify that the professional is properly registered with the Financial Conduct Authority (FCA), which ensures they adhere to the industry's regulatory standards. You can find me on the FCA register here.
Remember, a good financial planner isn’t just someone with impressive qualifications, they’re someone who understands your goals and knows how to help you get there.
How to become a financial planner
Thinking about a career as a financial planner? It’s a rewarding job for those who love helping others achieve their financial goals. To become a financial planner, you’ll need to earn certifications like Chartered Financial Planner. These certifications require you to pass exams and gain experience, but they open the door to a fulfilling career helping others design their financial futures.
Final thoughts: Planning for a bright financial future
Whether you’re just starting your financial journey or are deep into planning for retirement, having the right expert can make all the difference. Financial planning is a marathon, not a sprint. The earlier you start, the more likely you are to meet your goals.
The key takeaway? Know what you need: specific advice or a comprehensive plan. If you need help achieving your goals, start by booking a no-obligation consultation today. Let’s work together to create a roadmap for your financial future.
Related blogs you might enjoy:
The role of a financial planner – Learn more about the responsibilities and benefits of working with a financial planner.
For more personalised help with your finances, take a look at my financial planning services page. I offer tailored guidance to help you achieve your financial goals, whether you're saving for a dream home, preparing for retirement, or anything in between.
Ready to take the next step?
If you’re wondering whether you need a financial adviser or a planner, let’s chat. Book a no obligation consultation today and let’s start your journey to financial success. It’s never too early, or too late, to start planning!
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