Financial Planner vs Financial Advisor

The difference between a financial planner vs a financial advisor can often confuse people. Unfortunately, the financial services industry uses a lot of different titles for the people in it.

Different Names for People in the Financial Services Industry

Registered representatives of a broker-dealer would be people at Merrill Lynch, Wells Fargo, or Edward Jones. There are also investment advisor representatives. These are independent advisors, who can be fiduciary, fee-based, or fee-only advisors working for independent firms, such as registered investment advisory firms (RIA). Though not very straightforward, it is how the SEC and FINRA divide up the titles. The general public often gets confused because of how the different titles are used in marketing. They might call someone an advisor, a financial planner, a financial advisor, a wealth advisor, or a wealth manager. 

Financial Planner vs Financial Advisor

Ultimately, it’s not the title that matters but the kind of service a firm offers its clients. An investment advisor representative (IAR) who might call themselves a wealth manager, financial planner or financial advisor, usually does more than just assets under management. They also act as a financial planner who takes a look at your insurance, 401k allocation, tax strategy, estate planning as well as can manage your assets. All of those things are typically done by a financial planner, who’s usually a wealth manager at an investment advisory or a registered investment advisory firm (RIA).

Don’t get caught up in the title that they’re using at the firm. More so, look into how the firm is structured. Is it a fiduciary firm? Is it a fee-only or a fee-based firm? These are two very different things. Fee-only means they’ll  work in your best interest and won’t try to sell any products. Fee-based means they may offer financial planning, but afterward will probably try to sell you an insurance product. Regardless of titles, a fiduciary, fee-only advisor is always in going to give you advise that is in your best interest. 

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Casey Smith
President, Wiser Wealth Management

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By Published On: March 3, 2023

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