Share on facebook
Share on twitter
Share on linkedin
Share on pinterest
Share on telegram
Share on whatsapp
Share on email
Share on print

What does a financial planner do?

Financial planning can be a complex and time-consuming process. It requires a comprehensive understanding of personal finance, investment strategies, tax laws, and retirement planning. This is why many people turn to financial planners for help.
A financial planner is a professional who can help individuals and families achieve their financial goals. They provide personalized financial advice and can help clients avoid costly mistakes that could have long-term consequences. By analyzing their client’s financial situation, a financial planner can create a customized financial plan that addresses their specific needs and goals.

Financial planner vs financial advisor: What's the difference?

While the terms “financial planner” and “financial advisor” are often used interchangeably, there are some differences between the two professions.
A financial advisor is a professional who helps clients manage their investments and other financial accounts. They must hold a license and are regulated by financial industry organizations, such as the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Financial advisors provide guidance on stocks, bonds, mutual funds, and other investment vehicles, as well as help clients create a financial plan that takes into account their risk tolerance, financial goals, and timeline.
On the other hand, a financial planner is a professional who provides a wider range of services that go beyond just investing. A financial planner may offer services related to retirement planning, tax planning, estate planning, and insurance planning, among others. They may also hold specialized certifications, such as Certified Financial Planner (CFP), which requires a rigorous education and examination process. While not all financial planners may be licensed, those who offer investment advice must be registered with the SEC or a state regulatory body.
Financial planners typically take a more holistic approach to financial planning, considering a client’s overall financial situation and goals before making recommendations. They may work with clients over a longer period, adjusting their plans as the client’s needs and circumstances change. This approach often involves collaboration with other professionals, such as attorneys and accountants, to ensure that all aspects of a client’s financial situation are addressed.
In summary, financial advisors primarily focus on investment management, while financial planners take a broader approach to financial planning. Both can be valuable resources for individuals seeking to improve their financial situation, and the best choice will depend on the specific needs and goals of the individual.


When a financial planner is necessary

1. Those who over analyse or don’t know where to start

Do you find yourself putting off taking control of your finances? Maybe it’s because you tend to over-explore your options, feel easily overwhelmed, or don’t know where to start.
Here’s the good news: Hiring a financial planner could solve all these money woes. Their insights and suggestions may provide just the validating push you need to get out of your inaction funk.

2. Those uninterested in personal finance

Personal finance can be a complex and confusing subject. Some individuals may not have an interest in the topic or may find it overwhelming to manage their finances on their own. Hiring a financial planner can take the burden off of these individuals and allow them to focus on other aspects of their life. Financial planners can provide a range of services, from basic budgeting to comprehensive financial planning. They can also help with tax planning, estate planning, and investment management. 

3. Spouses with different money goals

For many married couples, finances are among the most significant challenges to navigate. This is especially true when each person has a different approach to money.
If you and your partner are in this predicament, a financial planner can act like a financial therapist. Not only will they provide money advice to both partners, but they’ll also provide each with the chance to share their financial ideas and reasons behind each one productively and agreeably.
That’s because the financial planner is a neutral, third-party expert with both partners’ best interests in mind, making it easy to follow their advice without bias or ego. They may also find financial compromises to help the couple achieve their goals.

4. Retirement planning

Retirement planning is a long-term process that requires careful consideration and planning. Financial planners can help individuals create a retirement plan that aligns with their financial goals and circumstances. They can evaluate an individual’s current retirement savings and make recommendations on how much more they need to save to meet their goals. They can also advise on investment options that align with an individual’s risk tolerance and investment objectives.

5. If you're about to make a significant decision

Any significant life decision that involves money, such as buying a home or starting a business, requires careful planning and consideration. Financial planners can help individuals evaluate the financial impact of their decisions and provide advice on how to make the most informed choices. They can assess an individual’s financial situation and provide guidance on how to make their finances work for them. By working with a financial planner, individuals can feel confident in their financial decisions and understand the long-term implications of their choices.
In summary, financial planners can be an invaluable resource for individuals who need help managing their finances or making informed financial decisions. They can provide a range of services, from basic budgeting to comprehensive financial planning, and can help individuals reach their financial goals. Whether you’re just starting out or looking to retire, a financial planner can provide the expertise and guidance you need to make the most of your finances.