What’s the Difference Between a Financial Planner vs Financial Advisor?

Financial planning and financial advisory are two terms that are often used interchangeably, but there are some key differences between the two.

If you are an Australian looking for professional financial assistance, knowing which one is right for you is important. So, what's the difference between a financial planner vs financial advisor in Australia?

In short, financial planners tend to take a more holistic approach to your finances, looking at your entire financial picture to develop a comprehensive plan that meets your goals.

On the other hand, financial advisors typically focus on managing your investments and providing advice on specific financial products.

If you're still unsure which one is right for you, don't worry! In this article, we will dive deeper into the differences between financial planners and financial advisors in Australia.

We'll cover everything from their qualifications and certifications to their scope of services and fees.

So, let's get started and find out which one is right for you!

Would you like to speak to a specialist? Book a complimentary discovery session by calling: (03)999 81940 or emailing team@klearpicture.com.au.

Financial Advisers

Because they are providing you with guidance in regard to your money, anyone who provides you with advice on financial products can, in essence, be referred to as a "financial adviser" because they are providing you with advice. Yet, a licenced Financial Adviser has completed extensive training, typically covering a variety of different aspects of finance.

What Kind of Services Does a Financial Advisor Provide?

A financial adviser, also known as a financial planner, is a professional who can assist you in determining your desired level of financial well-being and developing a strategy to help you get there.

Investing, superannuation, retirement planning, estate planning, risk management, and insurance are some of the topics that are normally under the purview of a financial adviser's expertise.

It's possible that certain financial advisers also have the credentials to offer tax advice. The advice can take many forms, from a one-time consultation on a specific matter to ongoing counsel on a variety of topics.

Certified Financial Planners

Certified Financial Planners typically have more extensive and in-depth financial training than other professionals. They probably have a degree in a relevant field or a Certificate in Financial Planning as their educational background. This indicates that they are able to develop a comprehensive financial plan for you that takes into account all elements of your financial life, including taxes, insurance, investments, superannuation, and estate planning.

What Is Financial Planning?

In the context of personal finance, "financial planning" refers to the process of formulating plans to amass wealth and realise one's financial objectives, such as becoming financially self-sufficient or enjoying a fulfilling retirement.

Would you like to speak to Klear Picture retirement specialist? Book a discovery session by calling: (03)99981940 or email on team@klearpicture.com.au.

A financial planner, also known as a financial adviser, will collaborate with you to create a financial plan, now referred to as a Statement of Advice (SOA), and will provide you guidance on how to realise your goals within the plan. They are able to offer guidance on a variety of topics, including the following:

• investing
• superannuation and retirement planning
• estate planning
• insurance

Crucially, they should either possess or be employed by an organisation with an Australian financial services licence (AFSL) issued by the Australian Securities and Investments Commission (ASIC).

What Kind of Training Is Required to Become a Financial Planner?

The Financial Adviser Standards and Ethics Authority (FASEA) establishes the prerequisite skills and experience levels needed to function as a financial advisor in Australia. These are the following:

• an approved Bachelor's degree or higher

• a year of supervised practice

• an exam set by FASEA.

• a minimum of forty hours' worth of professional development should be completed every year.

Beginning on January 1, 2019, this educational requirement will be imposed on newly licenced financial advisers. The deadline for current financial advisers to comply with this new Standard is the 1st of January 2026.

In addition, several Financial Planning Association (FPA) participants have finished extra coursework to earn the CERTIFIED FINANCIAL PLANNER® professional credential and are acknowledged on a global scale in their field. These individuals have the CFP® designation.

What Is It That You Require?

If you are only interested in purchasing a new life insurance policy, a Financial Adviser will undoubtedly be able to assist you in finding what you need.

Having a comprehensive approach, however, in which all the separate components interact together to offer you balance, flexibility, and strength is the ideal way to build and safeguard your financial position.

This is because having a comprehensive strategy allows you to: When faced with a situation like this, the knowledge and experience of a Certified Financial Planner can be a game-changer.

When picking a Certified Financial Planner, it is smart to think about the aspect of planning that is most essential to you because different planners tend to specialise in different aspects of financial planning.

How to Choose a Financial Advisor Who Meets Your Specific Requirements

If you are seeking for an independent financial adviser, a list may be able to assist you in narrowing down your choices.

You can also look for advisors on the websites of professional organisations like the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA), where they both have a section called "Your Best Interests."

Both of these websites provide a function titled "find a financial adviser/planner" that allows users to filter down their search results for financial advisers by location.

You are also given the option to choose advisors who are "not institutionally aligned" when you use the Your Best Interests tool. It is important to keep in mind that the PIFA might not even consider the advisers who are accessible through these methods to be "independent."

It is recommended that when you meet with a financial consultant, you ask them questions regarding the following topics:

• what their credentials are, and what their areas of expertise are.
• who constitutes the majority of their customers
• how they charge, namely what kinds of fees they impose and how much each cost is.
• how they decide which goods to recommend, and whether or if they earn any commissions or other forms of incentive for doing so.

When Is the Right Time to Consult a Financial Planner?

There is a widespread misconception that guidance on financial planning is reserved solely for those considered "rich." On the other hand, it can assist people of any age plan for the future and accomplishing their monetary objectives.

An expert who specialises in financial planning might assist you if you are looking for ways to grow and safeguard your wealth.

It is never too early to begin planning for one's financial future, as financial planners deal with clients at all periods of life, from those in their 20s and 30s to those approaching retirement, it is never too early to begin.

Your connection with your financial planner should, ideally, be one that lasts your entire life.

Individuals will frequently seek out financial counsel in conjunction with significant life events. It may be a good idea to seek the assistance of a professional financial advisor if you are considering the purchase of your first house, launching a business, arriving with children, or approaching retirement.

As financial planning is a specialised field of work, it is imperative that you seek the guidance of a financial planner who holds the appropriate credentials and licences.

Are All Financial Planners Also Financial Advisors?

There is a distinction to be made between financial planners and financial advisors; not all financial advisors are also financial planners. It's possible for a financial advisor to work for a broker, a banker, or in another part of the financial business altogether.

Advice for Those Looking to Employ a Financial Planner

It is time to engage a financial planner now that you are aware of the qualities you desire in such an individual.

But keep in mind that you shouldn't hire the first person who claims to be able to meet all of your requirements.

You should do some preliminary research before hiring a financial advisor to ensure that they will be able to look after your needs over the long run.

1. Referrals

Requesting referrals from people in your immediate family, circle of friends, place of employment, and community in a similar financial circumstance as you is the ideal place to get started.

Do they work with a reliable financial advisor, and if so, how do they feel about working with them? You may learn a lot about a potential financial advisor before encountering them by inquiring for referrals. This will allow you to understand better how to deal with them initially.

2. Fee Structures

When conducting financial planning, it is imperative that you always take expenditures into consideration. Examine the tiers of pricing attentively, and if anything is unclear or causes you concern, don't hesitate to ask questions.

Before moving further with working with this potential advisor, you should insist that they satisfactorily answer these questions.

3. Certifications

You may be seeking a specialised financial advisor, perhaps someone specialising in insurance planning or divorce.

Make it a point to enquire about these certificates straight away so that you can feel confident that you and your financial planner are moving in the right path from the beginning of your relationship.

One Last Thing

Regardless of whether you choose to work with a Certified Financial Planner or a Financial Advisor, there are three considerations that you should give some thought to:

• Make it a point to verify that they are members of the appropriate professional organisation. The Financial Planning Association of Australia is the organisation to which Certified Financial Planners should belong. The Association of Financial Advisers is the organisation to which Financial Advisors belong. These organisations require their members to adhere to a Code of Ethics and continue their education and professional development regularly to maintain membership. This helps these organisations ensure their members are current with the latest industry trends and needs.

• Make it a point to confirm that you will receive a Financial Services Guide. This will include a description of their qualifications and a list of all the items they are authorised to advise.

• Make sure that whoever you decide to go with is someone who makes you feel at ease. You will have conversations with them about some of the most private and significant events in your life. Because having a good rapport is so important, you should trust your intuition after researching their qualifications.

So, Which Should I Go To?

To circle back around to the question we asked before, what exactly are your motivations for obtaining professional assistance with your finances?

A financial planner is the perfect kind of expert to consult with if your goal is to construct, expand, and maintain your wealth and if you are not already under significant financial strain.

If you are having any kind of trouble with your finances, the most effective solution for getting you back on your feet is to work with a financial counselling service.

After you have achieved some level of financial stability, you should strongly consider seeking the assistance of a financial planner in order to assist you in achieving your long-term monetary objectives.

Bottom Line

In conclusion, financial planners and advisors in Australia play a crucial role in assisting individuals in reaching the financial goals that they have set for themselves.

There may be some overlap in the services that are provided by the two professions; nonetheless, there are significant differences between them.

The process of financial planning is often approached by financial planners in a more all-encompassing manner, taking into account a diverse range of aspects, including retirement planning, tax minimisation methods, and estate planning, amongst others.

Additionally, they can be expected to abide by a more stringent code of ethics and have to possess more advanced qualifications.

On the other hand, financial advisors may choose to specialise in a particular field, such as investing or insurance and place a greater emphasis on advising clients and guiding them through the purchase of specific financial products.

Suppose you are seeking assistance with your finances. In that case, it is vital to understand the distinctions between these two professions in order to select the one that will serve your requirements and objectives in the most satisfactory manner.

Are you currently residing in Australia and seeking assistance with your finances? Do you have a clear understanding of the distinction between a financial planner and a financial advisor?

There may be a degree of duplication in the services provided by the two professions, but there are also important distinctions between them.

When it comes to arranging one's finances, a financial planner will often take a more all-encompassing approach, whereas a financial advisor may choose to specialise in certain areas.

Which option is most suited to your needs? It is essential to have a solid understanding of the distinctions and select the one that caters to your specific requirements and objectives.

Would you like to speak to a specialist? Book a complimentary discovery session by calling: (03)999 81940 or emailing team@klearpicture.com.au.

Content Summary

• Financial planning and financial advisory are two terms that are often used interchangeably, but there are some key differences between the two.
• If you are an Australian looking for professional financial assistance, knowing which one is right for you is important.
• In short, financial planners tend to take a more holistic approach to your finances, looking at your entire financial picture to develop a comprehensive plan that meets your goals.
• On the other hand, financial advisors typically focus on managing your investments and providing advice on specific financial products.
• It's possible that certain financial advisers also have the credentials to offer tax advice.
• Certified Financial Planners typically have more extensive and in-depth financial training than other professionals.
• They probably have a degree in a relevant field or a Certificate in Financial Planning as their educational background.
• A financial planner, also known as a financial adviser, will collaborate with you to create a financial plan, now referred to as a Statement of Advice (SOA), and will provide you guidance on how to realise your goals within the plan.
• The Financial Adviser Standards and Ethics Authority (FASEA) establishes the prerequisite skills and experience levels needed to function as a financial advisor in Australia.
• When picking a Certified Financial Planner, it is smart to think about the aspect of planning that is most essential to you because different planners tend to specialise in different aspects of financial planning.
• If you are seeking an independent financial adviser, a list may assist you in narrowing down your choices.
• When you meet with a financial consultant, it is recommended that you ask them questions regarding the following topics: their credentials and areas of expertise.
• An expert who specialises in financial planning might assist you if you are looking for ways to grow and safeguard your wealth.
• Your connection with your financial planner should, ideally, be one that lasts your entire life.
• As financial planning is a specialised field of work, it is imperative that you seek the guidance of a financial planner who holds the appropriate credentials and licences.
• There is a distinction to be made between financial planners and financial advisors; not all financial advisors are also financial planners.
• It's possible for a financial advisor to work for a broker, a banker, or in another part of the financial business altogether.
• It is time to engage a financial planner now that you are aware of the qualities you desire in such an individual.
• You should do some preliminary research before hiring a financial advisor to ensure that they will be able to look after your needs over the long run.
• Requesting referrals from people in your immediate family, circle of friends, place of employment, and community in a similar financial circumstance as you are the ideal place to get started.
• You may learn a lot about a potential financial advisor before encountering them by inquiring for referrals.
• Make it a point to enquire about these certificates straight away so that you can feel confident that you and your financial planner are moving on the right path from the beginning of your relationship.
• Make it a point to verify that they are members of the appropriate professional organisation.
• Make it a point to confirm that you will receive a Financial Services Guide.
• This will include a description of their qualifications and a list of all the items they are authorised to advise.
• A financial planner is the perfect kind of expert to consult with if your goal is to construct, expand, and maintain your wealth and if you are not already under significant financial strain.
• If you are having any kind of trouble with your finances, the most effective solution for getting you back on your feet is to work with a financial counselling service.
• After you have achieved some level of financial stability, you should strongly consider seeking the assistance of a financial planner in order to assist you in achieving your long-term monetary objectives.
• There may be some overlap in the services that are provided by the two professions; nonetheless, there are significant differences between them.
• Suppose you are seeking assistance with your finances.
• In that case, it is vital to understand the distinctions between these two professions in order to select the one that will serve your requirements and objectives in the most satisfactory manner.
• There may be a degree of duplication in the services that are provided by the two different professions, but there are also important distinctions between them.
• It is essential to have a solid understanding of the distinctions and select the one that caters to your specific requirements and objectives.