When it comes to managing your finances and planning for the future, seeking professional assistance is a wise decision. However, the terminologies used in the financial industry can be confusing, often leaving individuals unsure about the distinctions between different roles.
Two common titles that are often used interchangeably are ‘financial adviser’ and ‘financial planner’. We aim to shed light on the similarities and differences between these roles, helping you make informed decisions when seeking financial advice in the UK.
In the industry, many see ‘financial advisers’ and ‘financial planners’ as two distinct roles. ‘Financial advisers’ are professionals who provide expert advice and guidance on various financial matters. Their primary role is to help clients make informed decisions regarding investments and other financial products. ‘Financial advisers’ assess a client’s financial situation, risk tolerance, and investment goals to develop personalised investment strategies. They tend to focus more on transactional issues as opposed to holistic planning, and their recommendations mostly revolve around the products on offer.
On the other hand, a ‘financial planner’ takes a broader view of an individual’s financial well-being. Rather than solely focusing on investment decisions, financial planners consider various aspects of a client’s financial life. They analyse income, outgoings, savings, debts, and financial goals to create comprehensive plans that cover multiple areas, including budgeting, insurance, retirement planning, tax strategies, and estate planning. They tend to focus more on life goals and how to achieve them, and less on the specific products used to achieve them.
These comparisons can be a little simplistic. It would be unusual for a ‘financial adviser’ not to take the client’s overall objectives into account, and a ‘financial planner’ is still likely to recommend a product provider.
It is important to note that titles like ‘financial adviser’ and ‘financial planner’ are not protected, which means that anyone is free to use them. However, it is illegal to give financial advice without being authorised and regulated by the FCA (Financial Conduct Authority).
Additionally, individual preferences come into play. Some professionals like to be called ‘financial advisers’, while others prefer ‘financial planner’, ‘wealth manager’, or ‘financial consultant’, even though they may all be offering the same service.
So, is there a difference between a ‘financial adviser’ and a ‘financial planner’? Perhaps, but it is impossible to tell based solely on a job title. The only way to tell is to speak to the adviser/planner and find out how they work and the services they offer.
This information is based on our current understanding and is subject to change without notice. This article is for general information only and does not constitute advice. Whilst information is considered to be true and correct at the date of publication, changes in circumstances, regulation and legislation after the time of publication may impact on the accuracy of the article.
The value of investments and the income from them can go down as well as up and you may not get back the amount originally invested.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.