Financial advisor or financial planner – what’s the difference?
What is a financial advisor?
A financial advisor is responsible for setting up a pension and selecting an investment provider.
Financial advisors, independent or otherwise, are more likely to concentrate on one problem. They do not consider the whole picture. They focus on the specific question and only advise you on what you asked.
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You may need advice about how to invest a lump amount for the long-term. A financial advisor will review all options and recommend the best strategy. This approach has the risk of missing something vital. Maybe the lump sum should be invested. But what if you have to use the lump sum for another purpose?
Although financial advisors are valuable, they do not answer the big questions. Questions like “Will I be okay?” “When can I retire?” and “How much can I save for retirement?”
Financial advice can also be problematic because it focuses on financial products. Pension advisor are only paid if they recommend a product, regardless of whether it’s an ISA or a pension.
What is the cost of a financial advisor? They will typically charge between 2 and 3% of the investment amount. They will charge around PS10,000 for a PS500,000 investment.
What is a financial planner?
Independent financial planners will examine the whole picture of your finances and take a holistic approach. A financial planner can help you determine what you want out of life, and create a financial plan that will make it possible.
A financial advisor and a planner are two different things. One focuses on you and your goals while the other focuses more on your money and investments. Financial planners combine their knowledge in tax planning, budgeting, investments, and pensions to develop a comprehensive strategy for your finances.
A financial planner can help you take control of your finances and give you confidence in your financial future. A financial planner will develop a financial plan that provides a roadmap to your financial future. A financial plan will help you determine where you are now and where you want it to go.
Financial products such as an ISA and a pension may be part of a financial strategy. However, these tools are just tools that help you get the job done.
What is the cost of a financial planner?
Independent financial planners charge a flat fee. The cost of your services will vary depending on the complexity of your situation. Our fees range from PS2,000 to PS4,000. This includes the design and construction of your financial plan as well as any implementation recommendations.
A financial planner can be a better investment than hiring someone else. Working with a financial advisor will give you a complete review of all aspects of your finances. You will also receive a personalized financial plan.
What is right for you?
A financial advisor is best if you are just looking to create an ISA and don’t care about the ‘big picture’. Financial planning is for you if your goal is to have control over your finances and plan for the future.
We have found that the majority of people believe they need a financial advisor. But, they really do need a financial planner. No one is trying to make money just for the sake. A financial planner can help you understand where you are now and where you want it to go. This will ensure that you get the best advice possible.
A Certified Financial Planner (CFP) is a person who truly understands financial planning and advice. This designation is synonymous with global standards in financial planning.