Financial Advisor vs. Financial Planner

Managing your finances can be complicated. So when you send out an SOS signal, what type of professional do you prefer to have onboard? Financial advisors and financial planners are two common types of professionals that could serve as your life preserver.

What’s the difference between a financial planner and a financial advisor? Great question. Both can help you achieve your financial goals. From an estate plan to tax planning and a range of investment products, you can reach into the investment management space and get the help you deserve.

Benzinga explores the key variations between these two roles and how they can each contribute to your financial needs and success. Read on to understand the key differences between a financial advisor and a financial planner to help you decide which one is right for you.

What is a Financial Advisor?

A financial advisor is a broad term for a professional who helps you manage your accounts and investments. It’s helpful to think of “financial advisor” as an umbrella term that includes many types of professionals. Generally, advisors analyze your personal finances and financial situation, then provide tailored advice to meet your specific financial goals. 

Financial advisors come from a variety of professional backgrounds and expertise. Advisors can be insurance agents, money managers, bankers or stockbrokers. Typically, financial advisors specialize in a particular area within the financial industry. 

They may help you:

• Manage investments
• Buy or sell stocks
• Create tax plans
• Help you plan for retirement
• Help you determine how to repay debt 

Depending on their area of specialization, advisors may hold a series of licenses, overseen by the Financial Industry Regulatory Authority (FINRA).

What is a Financial Planner?

A financial planner is a type of financial advisor who specializes in helping companies or individuals create comprehensive programs to meet long-term financial goals. Planners are a popular choice for individuals who need money help and have straightforward financial goals. Financial planners tend to specialize in a particular financial area and may hold various licenses based on their specialization. Commonly held licenses include: 

• Certified Financial Planner (CFP)
• Chartered Financial Analyst (CFA)
• Chartered Financial Consultant (ChFC)
• Certified Investment Management Analyst (CIMA)

In order to be a CFP, financial planners must pass rigorous exams and meet other requirements set forth by the CFP Board.

Is There a Difference Between a Financial Advisor and a Financial Planner?

Both financial advisors and financial planners help clients with investment management and set financial goals. They can come from a variety of professional backgrounds, hold several professional licenses and belong to professional organizations, but at the end of the day, they are a human advisor who can easily connect with you.

The cost of services for both financial advisors and financial planners can fluctuate greatly depending on their fee structure and the amount of service required. With all of their similarities, it can be difficult to distinguish the difference between a financial advisor and a financial planner. Understanding the difference between these can help you decide which professional you want on your team.

The main difference between advisors and planners is the specialized services each type of professional offers. You’re still dealing with an investment professional who can help with an investing plan. However, they may or may not be a tax professional, depending on their training.

Financial advisors are professionals who help clients manage their accounts and investments, both short and long term. Financial planners, on the other hand, specialize in helping individuals and companies make and meet long-term financial goals. 

Who Should Use a Financial Advisor? 

Financial advisors offer a range of services and advice. It’s important to clearly define what type of advice you’d like and discuss the advisor’s qualifications and experience in that area. If buying or selling stocks is one of the services your financial advisor will assist you with, then make sure that he or she holds a Series 65 license. A Series 65 license means that your advisor is qualified to give you investment advice and has passed the Uniform Investment Adviser Law Examination, overseen by FINRA.

Financial advisors can come from a variety of financial backgrounds so it’s also important to find out whether he or she is a fiduciary. A fiduciary is a financial advisor legally obligated to act in your best interest by the Securities and Exchange Commission (SEC).  

So, if you need any of the following things, you should speak with a financial advisor:

• Investment products
• Risk management support
• Help with asset allocation
• Advice on building an emergency fund
• Help with retirement accounts and bank accounts
• Support with your insurance needs

Who Should Use a Financial Planner?

Identify whether you’re after short term or long-term goals. You can use a financial planner to help you meet either long-term or short term goals. Find out whether a planner you’re considering is a certified financial planner (CFP). This designation means your planner has taken rigorous financial tests, completed intensive work experience and is beholden to the CFP’s Board of Standards code of professional conduct. Many CFPs are also fiduciaries.

When working with a financial planner, you might need some more advanced services. This is the sort of person you talk to when your family needs help, you have a business, you need to build a succession plan, etc.

How to Find a Financial Advisor 

Ask family, friends or colleagues in good financial standing for referrals. You can also reach out to professional organizations such as the National Association of Personal Financial Advisors (NAPFA) or look at the Accredited Financial Counselor website to find financial advisors in your area. You can also ask professionals in the field such as CPAs or bankers if they have any referrals or recommendations about professionals in the area.

Regardless of the route you take, clarify your financial goals and come up with a list of questions that will help you determine whether their services are a good fit for your financial needs. 

You can look up advisor credentials on the FINRA or CFP Board websites. Check for fiduciary status on the National Association of Certified Financial Fiduciaries (NACFF) website. Finally, make sure you have a clear understanding of what the costs are so that you can compare a particular advisor to other professionals in the field.

Benzinga’s Best Financial Advisors and Planners

• Best for Retirement Advice: Datalign
• Best for Matching with Advisors: Money Pickle
• Best for Comparing Advisors: SmartAsset
• Best for Financial Planning: Domain Money
• Best for Preparing for Retirement: Retirable

1. Best for Retirement Advice: Datalign

Datalign Advisory functions as a financial advisory company that wants to simplify how consumers will find the financial advisors they need. The platform connects users with vetted fiduciary advisors from their network, providing personalized guidance and assistance.

So, you’re working with people who have a fiduciary responsibility where your funds are concerned, and you get focus, transparency, user-driven guidance, and action-oriented approach. The data-driven approach to finding a financial advisor makes your life easier, and it expedites the process quite a bit.

2. Best for Matching with Advisors: Money Pickle

Money Pickle is a versatile personal finance platform that offers a wide range of features and resources to help users manage their finances. It has an easy-to-use interface, provides a holistic view of finances, offers educational resources, and personalized recommendations. The platform also emphasizes security and is suitable for individuals at all stages of their financial journey.

By analyzing your spending habits and financial goals, the app provides actionable insights and suggestions to optimize your financial health. Whether it's recommending a better credit card with higher rewards or suggesting ways to reduce unnecessary expenses, Money Pickle's recommendations can potentially save you money and maximize your financial potential.

For users interested in investment management, Money Pickle offers a robust suite of features. The platform allows users to connect their investment accounts, such as 401(k)s or brokerage accounts, and provides real-time updates on investment performance.

3. Best for Comparing Advisors: SmartAsset

SmartAsset is the sort of platform that wants to help you build wealth and make the most of your money. The platform does this by asking you to complete a simple quiz, explaining how you an make changes to improve your financial position and providing you with calculators that make for smarter financial decisions.

SmartAsset connects you with an advisor that allows you to build around your family’s goals. You can work with this platform to find a financial planner or advisor with whom you can forge a relationship. Then, you can get even more information on retirement, home buying, home selling, credit and much more. So, that makes SmartAsset more of a lifestyle firm that can support you for many years to come.

4. Best for Financial Planning: Domain Money

Domain Money is the one place you can go to curate your crypto portfolio and help your money work for you. There are a few portfolio styles from which you can choose, including:

• Domain Edge: The 100%, turnkey crypto portfolio that gives you instant exposure to this asset class.
• Domain Core: A 100% stock portfolio that focuses on companies working with the blockchain, mining and in other parts of the crypto space.
• Domain Balanced: Targeting innovative projects and stocks, with 50% on crypto and 50% on stocks.
• Domain Metaverse: A crypto and stock portfolio that offers unique exposure to the NFT space.
• Domain Access: A portfolio that features 80% stocks and 20% crypto.

You will not need to deal with lockups and the minimums range from $100 to $500 with and a 1% annual management fee. This makes it much easier to get in on the ground floor of crypto, diversify, plan for the future and much more.

5. Best for Preparing for Retirement: Retirable

Thinking about retirement. Not sure how to plan for the day you stop working? Unsure where to begin? When you use Retirable, you will connect with fiduciaries that will:

• Offer dynamic retirement advice and support
• Help you manage cashflow
• Ensure that you’re making retirement plans that match your funds
• Help you make changes to your retirement plans as needed

The platform is designed for you to keep a fairly high account balance, with around $250 in fees hitting your account if your balance ever falls below $33,000. At the same time, this is the sort of platform you can use to help the grandkids, pay for college, retire and achieve new dreams.

Get the Best Financial Advice for Your Needs

Managing your finances by yourself can sometimes feel like sailing into unknown waters. Bring a financial planner or financial advisor onboard to help you navigate the ins and outs of financial planning and create strategic plans to meet your financial goals. Identify your financial goals and do some research to see whether the services offered by a financial planner or financial advisor are a better fit for you.

Frequently Asked Questions