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Choosing the right personal finance advisor might be difficult. You may have reached a moment in your life where your financial skills aren’t quite adequate for accomplishing your financial objectives. If you’re trying to decide whether you need a financial planner or an investment advisor, you could be at a loss. Navigating the realm of personal economics can be challenging to grasp. Recognising you require the assistance of a knowledgeable financial professional is one thing. Knowing the type of expert to hire can be another difficulty. So, here’s a quick discussion on financial advisor vs financial planner.
The financial planner definition says that this professional is someone who helps you plan and manage your financial decisions. They understand your goals and then make a plan that works best for you. It’s not just about saving or investing; they look at your overall situation. The following are the queries they may come up with:
Once they have all the information, they help build a financial plan around it. The best part is that they offer continued support and make adjustments when significant changes take place – be it job switches, childbirth, or anything unexpected.
Here’s a quick example to help you understand the role of a financial planner. Robert and Ria just had their first wedding anniversary. They live in a rented 2BHK in Bondi and are expecting their first baby. With a baby on the way, they started thinking about bigger things:
So they talked to a financial planner and have got a plan in place for the present and the future. A financial planner, thereby, makes everything streamlined for you.
Let’s understand the role of financial advisor here. People typically hire an investment advisor to assist them with specific investments and asset management issues. They typically have a clear financial plan and sufficient cash to invest, and they are explicitly looking for a more sophisticated investing strategy.
Michael and Jenny are a retired couple who handle their retirement fund. Their pension is managed, and they know how long their money will last. They own both their primary residence and a vacation home. They have investments set up and know the asset classes they want to invest in. They hired an investment adviser to help them decide which assets to acquire and sell within their SMSF.
The difference between financial planner and advisor often confuses people, but once you see how their roles differ, it gets clearer. Both help manage money, but they serve distinct purposes and follow different approaches. Let’s break this down in a detailed manner.
Now that you have a brief idea of a financial advisor definition and the role of a financial planner, here’s looking at the differences in a concise tabular format –
| Aspect | Financial Planner | Investment Advisor |
| Regulator | Not always SEBI; may be certified by FPSB | SEBI-regulated |
| Focus Area | Complete financial life: tax, retirement, estate, insurance, etc. | Investments, portfolio optimization, and market guidance |
| Goal Orientation | Life goals, financial independence, retirement, legacy | Maximise returns within risk tolerance |
| Client Interaction | Ongoing, goal-based relationship | Trade/execution-focused, periodic reviews |
| Services Offered | Holistic financial planning | Focused investment advice |
| Typical Certification | CFP (Certified Financial Planner) | SEBI Registered Investment Advisor (RIA) |
While people often use the term “financial advisor” loosely, it can refer to many roles – investment advisor, financial planner, insurance agent, or even banker. The difference between financial advisor and financial planner is subtle but important. A financial advisor is a general term, while a financial planner focuses on long-term, life-goal-based planning. On the other hand, an investment advisor focuses strictly on investment products.
At IIFL Capital Services Limited, we recognize that there is no one-size-fits-all solution for everyone’s financial needs. This is why we are dedicated to creating individualized financial solutions for our clients.
To provide the best advice possible, we begin with a complimentary financial strategy session. This allows you to determine whether we can meet your needs and if we are a good fit for doing so. Whether you require the services of a financial adviser, a financial planner, or an investment advisor, or if you’re undecided, we’re here to help simplify the process and provide helpful advice that will benefit you.
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Financial planners often hold degrees in Certified Financial Planner, Chartered Financial Analyst, Accredited Asset Management Specialist and more. Besides checking these qualifications, ask your financial planner about the relevance of these certificates to your goals.
A financial planner can provide services related to investment advice. But, to do that, they required a proper license and registered with the regulatory bodies.
Financial planners help you in budgeting, retirement planning and getting taxation benefits. However, if your primary focus is on growing your wealth through stocks or other investments, then you can approach an investment advisor.
Financial advisors can charge you flat fees for consultation or get a commission when they sell a financial product. Some of them use both, depending on your financial planning.
Online financial advice is effective for basic financial planning. In order to handle complex portfolios, you have to look for personalised guidance.
This will depend on your budgetary planning and the market volatility. You may look at the portfolio every three to six months, when you notice a temporary shift in the market or sudden life changes like marriage or buying a house.
If your primary focus is on creating a strategy for budgeting, savings, retirement, taxes or insurance, then you can look for financial planning. In contrast, wealth management services provide you with services related to investment management or estate planning.
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