Locations in Arizona, Oklahoma, and Utah

Financial Planner vs Investment Advisor

The two terms financial planner and investment advisor may sound similar, but knowing the difference is vital to the success of your financial future. In this article, we’ll break down the differences so you can figure out what financial planner services are better aligned with your financial goals. 

What Is a Financial Planner?

A certified financial planner (or CFP) deals with the client’s overall financial health. Think of it as a primary care physician for your financial well-being. A financial planner helps clients meet their financial and life goals by properly managing their resources. This holistic approach is helpful for looking at how different financial strategies work together. 

To become a CFP, you must have a bachelor degree, and completed both the CFP education program and 6,000 hours of financial planning experience.

One important distinction is that financial planners can be investment planners. They can help you plan and strategize about every aspect of your finances, including insurance, taxes, retirement, estate planning, and investments. Be sure you have a detailed understanding of what exactly your financial planner offers, how much their services cost, and how much they are getting paid for their services. Don’t be afraid to ask your CFP detailed questions, so you can decide if they’re the right fit for you. 

What Is an Investment Advisor?

A Registered Investment Advisor (or RIA) offers clients advice and recommendations specifically about investments. They take the finances you have in long-term savings, and put them to work in the investment strategy best suited for your needs. 

Most investment planners do everything from making recommendations on where to invest, to actually buying and selling securities for their client, to everything in-between. It all depends on what works best for the client’s financial needs and preferences. Some people like to be more hands-on with their investments, while others prefer to leave it to the professionals. 

While becoming an RIA doesn’t require any specific training or qualifications, investment advisors must register with the Securities and Exchange Commission (or their respective state’s securities board). Additionally, they also must comply with the Advisors Act and file reports regularly with both their clients and the authorities. That transparency is key in building a trusting relationship between planner and client. Ask questions to learn more about how your investment planner operates, what services they offer, and how they are compensated. 

Get Strategic With Your Financial Planning

It’s never too early to chart out your financial future. Contact Trajan Wealth to learn about the financial planner services we offer and how we can help you plan and achieve your financial goals, so you can rest easy in the years ahead.