Financial Advisor vs. Financial Planner: What Do They Do?

Financial Advisor

If you’re thinking about becoming a financial professional, you have many options to choose from. Two of the most common options are financial advisors and financial planners. But what exactly do these professionals do? And what are the key differences between them? Let’s take a closer look at what financial advisors and financial planners do and how they differ from each other.


What is a Financial Advisor?

A financial advisor is a professional who helps people make smart financial decisions. They offer advice on various topics, including investing, saving for retirement, and tax planning. Financial advisors usually work with individuals but may also work with businesses. They can either work for a financial institution, such as a bank or investment firm, or they can be self-employed.


What is a Financial Planner?

A financial planner is a professional who helps people create long-term financial plans. Financial planners often work with individuals, but they may also work with businesses. They help their clients set financial goals and develop strategies for reaching them. Financial planners may also advise investing, retirement savings, and tax planning.


What are the Similarities Between the Professions?

When reading the two descriptions above, the similarities can easily be seen.

  • Education: Both financial advisors and planners need at least a bachelor’s degree. Many professionals in these fields also have advanced degrees, such as a master’s degree in business administration or financial planning.
  • Licensing: Both financial advisors and financial planners need to be licensed by the Financial Industry Regulatory Authority (FINRA).
  • Job duties: As you can see from the descriptions, both financial advisors and financial planners offer advice on topics like investing, saving for retirement, and tax planning. They also help their clients set financial goals and develop strategies for reaching those goals.


What are the Differences Between the Two Professions?

Even though financial advisors and planners have a lot in common, there are some key differences between these two professions.

  • Compensation: Financial advisors typically earn commissions on their products, such as investment and insurance products. Financial planners may also earn commissions, but they can charge hourly or flat fees for their services.
  • Services: The term “financial advisor” refers to many job titles, such as investment advisor, insurance agent, and stockbroker. Each type of financial advisor offers specific services to help their clients, such as investing in stocks or buying insurance. On the other hand, financial planners provide a more comprehensive range of services that focus on long-term financial planning.
  • Product sales: Financial advisors may sell products, such as investments and insurance policies. Financial planners usually do not sell products, but they may refer their clients to other professionals, such as financial advisors or insurance agents.



Now that you know the key similarities and differences between financial advisors and financial planners, you can decide which profession is right for you. If you’re interested in providing comprehensive financial planning services, becoming a financial planner may be your best option. Becoming a financial advisor may be the better choice if you’re interested in selling financial products. But remember, no matter your profession, you still get an excellent opportunity to help people with their finances.