Financial literacy is essential for proper financial planning and making sound investments. But there’s so much to managing finances that in many cases, it’s a good idea to hire a professional to ensure that money is managed in the best possible way and investments are maximized. Financial advisors and financial planners can both help their clients make sound financial decisions. But what is the difference between the two?
It’s important to choose the right financial professional to help you with your financial needs. If you live in Orlando, Florida, make sure you look for a financial planner or a financial advisor in Orlando who can help you. Both are financial professionals who help individuals to manage their money the right way. However, each has a different area of expertise and which you decide to hire should depend on what your financial goals and needs are.
What Is a Financial Advisor?
Financial advisor is the umbrella term for a financial professional who helps clients by giving financial advice. There are different types of financial advisors and financial advisors may specialize in different areas of finance, such as investment management or tax planning. Other financial advisors offer all kinds of financial services and function as an all-in-one advisor for their clients.
What Qualifications Must a Financial Advisor Have?
Typically, a financial advisor will have studied a subject relevant to finance, such as accounting, economics, or business, for at the very least a bachelor’s degree. On top of that, financial advisors also typically have qualifications from independent certification organizations, such as the Certified Financial Planner Board of Standards, Inc., which hands out the CFP qualification to those who pass its exams. There are many different certifications that financial advisors can qualify for and which certifications they have should depend on which services the financial advisor offers.
What Is a Financial Planner?
Not all financial advisors are financial planners, but all financial planners are considered financial advisors. A financial planner is a type of financial advisor that specializes in making financial plans for clients. While many financial advisors focus on things like investment management, although they can also create financial plans, a financial planner typically focuses on those financial plans.
What Can Financial Plans Be For?
A financial plan can be for any major financial decision. A financial planner can help their clients by developing plans for them to pay off debt, plan for retirement, plan for taxes, plan their estates, save money for a child’s educational expenses, purchase a house, save for having a family, and more.
Do I Need a Financial Planner or a Financial Advisor?
Whether you need a financial planner or a financial advisor depends on your financial needs. Someone who needs both financial planning services and investment management may need to seek out a financial advisor who offers both of those services. Someone who wants help creating a financial plan for saving money for their children’s college education may need a financial planner instead.