Ask the average Canadian what the difference between a financial advisor and a financial planner is and you’ll get the same answer 99% of the time.. a shoulder shrug or something along the lines of “I didn’t know there was a difference”. You can blame the financial industry for that.
Believe it or not, this ranks near the top of the frequently asked questions we get asked here at Planswell.
If you’re confused about even knowing there is a difference between a financial advisor and a financial planner, you’re not alone.
Most, if not all, of the confusion comes from the fact that the two terms, financial advisor and financial planner, are used interchangeably everyday. And no, this is not ok.
One of the first things that you need to know above everything else is that the term “financial advisor” is a broad term used across the entire financial industry.
A financial advisor refers to any professional that gives you “advice”, in other words advises you, on your personal finances and is licensed to sell you any type of financial product. And yes, to complicate things even more, this includes financial planners (otherwise known as Certified Financial Planners).
So when you hear the word “financial advisor”, just keep this in mind: a financial advisor is anyone who helps clients manage their money to some degree. Pretty general, right?
It’s an umbrella term that represents the entire industry.
A financial planner is a specific type of financial advisor (fitting into the umbrella term), and is typically an individual that creates programs for their clients dedicated specifically to meeting their short and long-term financial goals – otherwise known as a plan.
The distinct difference is that financial planners may hold various licenses or designations, most commonly the Certified Financial Planner, also known as the CFP.
The short answer is neither. Long gone are the days where you’d need to meet with your planner (or any sort of advisor) in person to go over your financial plan, and thankfully so. Would you rather spend countless hours and multiple meetings to create your financial plan or do it all for free online in less than 3 minutes? We’d like to think it’s a no-brainer.
At Planswell, we believe financial planning should be available to everyone without the bias, jargon or fees of the traditional financial industry. Our Plan Pros are always on call to make sure everything makes sense and you feel good about your free financial plan.