Financial Advisors and Financial Planners: Is there a difference?

Financial Advisors vs. Financial Planners: What’s the Difference?

Financial Advisors vs. Financial PlannersIn the consumer services sector of the financial planning industry, consumers are presented with not only a confusing array of specialized terminology and options but also a broad spectrum of different types of financial professionals. One of the most common questions we hear is, “What is the difference between financial advisors and financial planners?”

It’s no surprise that so many people are confused; after all, these two titles are often used interchangeably despite the fact that they don’t mean the same thing. The following information should help you distinguish between the two terms:

Financial Advisor

“Financial advisor” is a broad, general term that refers to a professional who helps you manage your money. In exchange for payment, financial advisors can help you with an array of financially related tasks including but not limited to: brokering the sale and purchase of stocks and mutual funds, helping manage investments, and helping with the creation of an estate plan and tax plan. If a financial advisor is working with the public, then he or she must have their Series 65 license, a special type of securities license required by most U.S. states.

As mentioned earlier, the term financial advisor is a broad one. Professionals such as insurance agents, stock brokers, estate planners, money managers, bankers, and others may be called financial advisors.

Financial Planner

A financial planner is a type of financial advisor. However, while every financial planner is a type of financial advisor, not every financial advisor is a financial planner. A financial planner generally helps individuals and companies meet their long-term financial goals. Some financial planners have specific specialties; for example, retirement planning, investment advisory services, and estate planning, just to name a few.

Some financial planners may have various licenses and designations. In order to obtain such licenses and designations, they must have successfully completed different education, examination, and work history requirements. Examples include but are not limited to: Certified Financial Planner (CFP), Certified Investment Management Analyst (CIMA), and Chartered Financial Consultant (ChFC).

The whole “financial advisor” vs. “financial planner” terminology misuse issue is not the only point of confusion in the financial planning industry. Be sure to also check out the Summit blog “5 Common Myths about Financial Advisors Debunked.”


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Summit Brokerage Services is part of Cetera Financial Group, RCS Capital Corporation’s (NYSE: RCAP) retail investment advice platform.

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