Investors sometimes get confused with the titles of various financial professionals. You can choose from financial advisers, investment advisers, financial consultants, financial planners ... and the list goes on. Knowing which one will best serve your needs is a plus when it's time for you to get some help in the money department
Definition of a Financial Adviser
- A financial adviser is someone employed by a financial services firm or is self employed who provides advice and manages investment assets. A financial adviser is a broad term that can include investment advisers, stockbrokers and financial planners. Financial advisers must hold the Series 65 license to dobusiness. Some advisers also get other licenses, such as the Series 7 license, to be paid commissions on products sold. This allows them to provide investment advice for a fee, which is typically a percentage of assets under management.
Definition of a Financial Planner
- A financial planner is someone employed by a financial services firm or is self employed. Financial planners manage investment and financial goals through asset allocation, estate planning, tax planning and retirement planning for a fee or through commissions. Financial planners typically hold multiple security licenses, such as the Series 7, Series 63 and Series 66. They do not need to hold the Series 65 if they hold both the Series 7 and Series 66 licenses. In addition, financial planners hold insurance licenses in various states.
Main Difference
- The main difference between a financial adviser and a financial planner is that an adviser typically focuses on management of a client's investments. A planner oversees most aspects of a client's financial situation, including investments, estate, taxes, retirement savings and insurance. That is why a financial planner must hold multiple security licenses and a financial adviser may only need one security license. In some cases, a client works with both an adviser and a planner. In that case, the adviser manages assets and the planner provides advice as to the client's entire financial situation.
A Financial Planner Can Be a Financial Adviser
- Many financial planners are also financial advisers since they typically manage their clients' investment accounts, but financial advisers aren't necessarily financial planners. If the financial financial planner is also an adviser, he typically puts his client's investment assets into managed programs for a commission or fee that lets other managers handle the investments. A financial adviser focuses his time and expertise on directly managing investment accounts, usually for a fee based on a percentage of assets managed.
