Investment advisors, financial planners: Not the same
As the economy improves, people are seeking financial direction. A recurring question concerns the difference between investment advisors and financial planners. Knowing the distinctions can guide a person to the best choice for their needs.
For starters, before hiring any financial professional, identify the services you require, and compare them to those offered. Sometimes there are limitations on what can be recommended. Often, there are sizable differences in the cost of services or even how the advisor or planner gets paid.
You may have heard the expression: Most financial planners are investment advisors, but not all investment advisors are financial planners. Investment advisors and financial planners do share some similarities, such as helping to manage client assets for a fee.
However, the range of services provided by a planner may differ in significant ways from those proffered by an advisor. Advisors who limit their professional services to investment choices are usually known by some variation of the title investment advisor. Their primary function is to place your money (usually long-term, but not always) within an appropriate investment strategy, based on financial situation, investment risk
Financial professionals’ contrasts are based on characteristics, including scope of work, fiduciary or suitability standards and cost structure for services rendered. Selecting a financial professional, who is best for you requires research.
tolerance and time frame. Although investment advisors sometimes call themselves financial planners, they may be able to recommend only a limited range of products based on the type of securities license they have; their suggestions may not always be securities. Investment advisors could also be stockbrokers with expertise in trading stocks, but they may not necessarily qualify as financial planners.
Financial planners, on the other hand, typically assess many aspects of their clients’ financial lives, including savings, college, investments, insurance, taxes, retirement and estate planning. They may help develop a detailed strategy to primarily meet financial