Financial Planner vs. Financial Advisor
Feb 24, 2024 By Susan Kelly

Financial Planner

The term "financial planner" refers to an expert who aids individuals and companies develop plans to achieve their financial goals over the long term. In general, a financial planner can help you create an outline to budget, save, and invest, as well as retirement planning. While many financial planners help individuals through their own business, they may be employed by a bank, wealth management firm, or non-profit group.

When selecting a financial planner is crucial to know the landscape of financial planning. Based on the Financial Industry Regulatory Authority (FINRA), nearly anyone can say they are a financial planner and could come from different backgrounds.

Financial planners could be investment advisors, brokers, insurance agents, practicing accountants, or even individuals without financial credentials. This is why customers must do their homework before handing over their funds to any financial advisor. There are some distinctions between the two words.

Financial Advisor

It is a broad term used to describe an expert who assists you in managing your finances. The advisor is paid, and they assist with various financial tasks. Financial advisors might help to manage investments, purchase or sell shares or develop comprehensive estate and tax planning. If the advisor works with the general public, they must have a FINRA Series 65 license. In addition to this license, there are other financial advisor credentials the advisor could have in relation to the offered services.

"Financial advisor" as a general term covers a wide range of professionals such as insurance agents, stockbrokers, estate planners, money managers, and bankers, among others. Investment advisors are one type of financial advisor that is specialized in securities.

Key Differences

While the two terms do overlap, a financial planner could be considered a form of financial consultant. Particularly, a financial planner is an expert who aids individuals or businesses in achieving their long-term financial goals. They can help plan for retirement, children's college education, the down payment to purchase an investment property, and many more. Financial planners rely on a strategic allocation of portfolios to invest in investments with long-term time horizons and ensure that the expected returns and risk tolerances are balanced.

On the other hand, a financial advisor is a broad term used to describe someone who can be involved in this kind of planning, but also in other aspects of financial management or products. They could, for example, offer mortgage, life insurance, or accounting assistance, make trades on short notice or provide banking services.

Scope of Work

Financial advisors are someone who provides advice to clients regarding financial matters. It's a broad concept encompassing many people who could assist you in managing your finances. Two experts could call themselves financial advisors but don't have the same characteristics. Brokers are financial advisors, for instance, but their responsibilities differ from those of an accountant or insurance agent, although they're both considered financial advisors.

In turn, the term "financial planner" is usually a person who employs a more extensive approach to the client's financial affairs. The work is typically more extensive and might involve fully managing the portfolio of investments and helping the client achieve their financial goals starting from college graduation to and beyond retirement. Instead of waiting for clients to inquire for advice on something, financial planners are more likely to look at the portfolio of a client for potential opportunities.

When a Financial Planner Is Best

You might need to hire an expert financial planner if you require more in-depth financial advice. You may have a significant amount of money that you aren't sure what to do with it, or you may run a small-sized company, or be in debt and aren't sure how to deal with, or when you have an even bigger task to be tackled an advisor from the financial world can assist in assessing the situation and suggest strategies to manage the situation.


Both financial advisors and planners assist clients with financial problems; however, they are not the same. Certified Financial Planners are required to meet the strict standards, while "financial advisors" can refer to a variety of professionals that may or might have to adhere to the same standards. If you require assistance with a particular financial problem and are looking for the best kind of financial adviser will provide the assistance you require. If you're dealing with an issue that is more serious or requires an experienced professional who can ensure your financial well-being and budget, the CFP is a superior alternative.