Financial Planner vs. Financial Advisor: Responsibilities and Differences

By Indeed Editorial Team

Published 23 August 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

If you're hoping to enter the finance industry, it's important for you to learn more about your options so that you can determine which career path is right for you. There is a lot of overlap between the different career opportunities and sometimes, job titles are interchangeable. This is certainly the case with financial advisors and financial planners, but despite their usage, there are distinct differences in the roles, responsibilities, and requirements for these two professions. In this article, we explain what financial planners and financial advisors are and explore the differences between a financial planner and a financial advisor.

Related: Choosing a Career Path in 11 Steps

Financial planners vs. financial advisors

If you're trying to decide on financial planners vs. financial advisors for your career path, here are some differences between them that you should know:

Duties

One of the primary differences between these two roles is who they meet with and what duties they perform. For example, certified financial planners (CFP) often work with individual investors on their financial goals and certified financial advisors (CFA) often analyse investments with corporations. Also, CFAs might directly assist their clients in stock and currency trading, while CFPs often outsource some of the day-to-day tasks while focusing on creating a plan.

Frequency of client meetings

A financial advisor might fulfil a short-term purpose that requires one or two meetings. In these meetings, they may organise data and make basic recommendations for their clients. Financial planners typically have an ongoing, long-term goal. Because of this, they usually have regular, ongoing meetings with their clients each month or quarter.

Education and licensing requirements

Both roles require at least a bachelor's degree in business, finance, math or related field. Most financial advisors earn a financial services license if they provide or advise in the following areas:

  • Securities

  • Futures

  • Foreign exchanges

  • Corporate finance

  • Automated trading

  • Margin financing

  • Asset management

Additional certifications

Financial professionals can earn their licenses through the Securities and Futures Commission of Hong Kong. Financial planners earn a CFP (Certified Financial Planner) certificate through the Institute of Financial Planners of Hong Kong. Certification requires candidates to meet the education, exam, ethics and experience qualifications determined by the IFPHK.

Relationships with clients

One of the biggest differences between a financial advisor and a financial planner relates to the relationships that they have with their clients. Financial advisors work on a suitability standard of care, meaning they can suggest suitable strategies and products for their clients, but they don't have to be the best options for their particular situation. Financial planners are often more familiar with the financial landscape and can recommend solutions based on how their client's situation relates to the current economy.

Salary expectations

A financial planner charges a percentage for managing someone's investment portfolio, but they occasionally charge flat or hourly fees for their services. Financial advisors often earn salaries through commission, fee-based payments or a flat fee. According to Indeed Salaries, the average salary for a financial planner is $20,616 per month. The average salary for a financial advisor is $22,806 per month.

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Professional experience required

Though both positions typically include on-the-job training, financial planners often need three years of experience before they can become certified. Finance professionals looking to enter this field often get experience with entry-level jobs like finance associates while working as a professional in financial services before receiving their CFP certification.

Financial advisors may require less experience than financial planners, as their role is more general. As with most other professions, some financial advisors choose to complete an internship to gain experience, but it isn't a requirement. Depending on if you plan to work with corporations or individuals, they may evaluate your years of experience.

What are financial advisors?

A financial advisor is any professional that helps you manage your finances. In exchange for a fee, a financial advisor assists their clients with a wide range of money-related tasks. Financial advisors often work with businesses to make investments, set budgets or other make other financial recommendations.

What are financial planners?

One type of financial advisor is a financial planner. This is a type of financial advising that primarily assists individuals and organisations as they develop plans that help them achieve their long-term financial goals. They typically adopt a more comprehensive and in-depth approach, but they can specialise in things like estate planning, retirement, taxes and/or investments.

What does a financial advisor do?

Some key responsibilities of a financial advisor include:

  • Developing a comprehensive tax and estate plan

  • Brokering the buying and selling of funds and stocks

  • Giving clients suggestions about their investments

  • Managing various investments

  • Advising clients on financial and investment strategies

What does a financial planner do?

Though they share responsibilities with a financial advisor, some specific tasks a financial planner might do include:

  • Researching relevant strategies for businesses and individuals

  • Assisting clients with retirement plans

  • Assessing risk on investment plans

  • Identifying new clients and managing existing client relationships

  • Preparing policy documents for companies

Other careers in finance

Because "financial advisor" is such a broad term, it encompasses several subset careers. Regardless of the subset, most financial advisor positions require candidates to have at least a bachelor's degree. There aren't any requirements regarding the field of study, but many financial advisors pursue a degree in mathematics, business, economics, accounting or finance. For example, some financial advisor careers can be:

  • Bankers: Bankers are financial professionals who provide lending services to individuals or companies.

  • Estate planners: Estate planners assist people who want to start planning their asset management once they are unable to or pass away. They might evaluate assets and determine the necessary steps for others to access their money and physical assets.

  • Money managers: Money managers assist and sometimes directly manage an individual's or company's finances. They determine high-yield investments, manage securities and strive to increase the client's holdings.

  • Insurance agents: Insurance agents sell insurance to companies and individuals.

  • Stockbrokers: Stockbrokers are financial professionals who buy and sell stocks for their clients. Individuals may hire stockbrokers to ensure they earn money when trading stocks.

Related: 50 of the Highest Paying Jobs You Can Apply For

Is a CFA better than a CFP?

Although the average salary of a CFA is higher, CFPs can make just as much or more depending on their clients. CFPs can be more stable as they receive steady salaries rather than CFAs who may earn more through commission. CFAs can often have more clients because of the short-term nature of their business, while CFPs might have fewer, ongoing relationships with customers. Depending on if you want to specialise in a specific area of financial planning or want to provide clients with general overviews, either can be a good career for you.

Related financial certifications

If you're interested in finance but would like to explore other areas, you can earn other certifications. Some certifications that can help you expand your career options include:

  • Certified Investment Management Analyst (CIMA): This international certification is for professionals hoping to become investment consultants and requires several years of successful and ethical work in finance.

  • Chartered Financial Consultant (ChFC): You can earn this certification as an alternative to the CFP certification. Some jobs require this certification to become a financial planner.

  • Chartered Financial Analyst (CFA): This is the American alternative to the Certified Financial Analyst certification. CFA certifications provide you with a network of chartered financial professionals.

  • Certified Public Accountant (CPA): Certified public accountants receive accreditation through the HKICPA (Hong Kong Institute of Certified Public Accountants). This certification can help verify your credentials as an accountant.

5 alternative careers in finance

Here are five alternative finance careers similar to financial planners and financial analysts:

1. Financial consultant

Average salary: $20,334 per month

Primary duties: A financial consultant is a type of advisor that audits your finances. They then can help you develop a strategy to reach your goals. Financial consultants often work with individuals and hold ChFC certifications.

2. Wealth manager

Average salary: $20,454 per year

Primary duties: Wealth managers are financial professionals that assist clients with high net worths. They might offer estate, tax planning or trust services to their clients. The goal of hiring a wealth manager is to maintain or increase a client's wealth. Wealth managers might work independently or for wealth management firms.

3. Investment consultant

Average salary: $25,946 per month

Primary duties: Investment consultants work with investors to recommend products or advice that guide them on future purchases. They create investment strategies and can work with individuals or companies. These professionals often receive certification in financial planning or financial advising.

4. Financial analyst

Average salary: $27,779 per month

Primary duties: Financial analysts are often entry-level finance jobs that professionals may take to gain experience for certification. They assist companies and individuals by gathering and analysing financial data. They prepare reports and share their findings with companies, recommending ways they can perform better in their markets.

5. Financial manager

Average salary: $36,378 per year

Primary duties: Financial managers oversee company finances. They may work with senior finance professionals at a company and advise on their budgets, investments or other financial decisions, like mergers. Often, companies hire internal financial managers to oversee the company finances, but they may also hire outside firms.

Related: How To Become a Financial Manager: Qualifications and Skills

Salary figures reflect data listed on Indeed Salaries at time of writing. Salaries may vary depending on the hiring organisation and a candidate's experience, academic background and location.

Please note that none of the companies mentioned in this article are affiliated with Indeed.