The difference between financial advisers & planners

Our Paraplanner, Rav Jackson, is currently completing an apprenticeship to become a qualified Financial Planner. In his first blog for us, he notes the difference between financial advisers and planners and, subsequently, which he wants to become.

As I complete my training with Stephen Eve, I have noticed that there is sometimes a divide within the industry between what financial advisers refer to themselves as. If you do any research or reading online you will often see 'financial adviser' AND 'financial planner'. It can be hard to differentiate between the two. In fact, there is no hard and fast rule about the difference in meaning and sometimes individuals even call themselves both.

There is a common line of thought that they are the same but, generally, financial planners would consider themselves a little different.

On my path to qualify to give financial advice, I am most inclined to refer to myself as financial planner. Here's why:

Usually, a financial planner takes a more holistic view of finances, focusing on you and your goals, working out what you want from life and then creating a financial plan to make it happen. This can include advice on investments, cash flow and the like. Whereas, a financial adviser typically focuses solely on investments and financial affairs without the lifestyle element.

This is in simple terms and there are nuances. But, if you are a potential client, it is useful to understand so you can make a choice about the kind of financial guidance you would like to receive.

Here are some more points to consider when choosing a financial adviser or planner:

Financial advisers

• Professionals who offer advice on investments, savings, estate management, and other areas of personal finance.

• Provide guidance and resources to help you achieve specific money goals, where these goals often involve figures rather than life events.

• Someone you would go to with a specific financial challenge, such as optimising your investment portfolio.

Financial planners

• Typically focus on providing people with roadmaps for maintaining long-term financial health and growth. 

• Can help with wider goals like preparing for retirement.

• If you’re seeking financial advice from a professional who will establish a long-term plan and relationship with you, a Chartered Financial Planner may be a better choice for your circumstances.

• A good financial planner can do everything a financial adviser can – they have the technical knowledge about pensions, investments, equities, bonds and more, but combine this with lifestyle. They take a more rounded approach.

With a financial adviser you can expect:

• Money/investment-focused advice, answering “How to invest my money”

• A short-term relationship

• Help finding the right product e.g. pension, ISA

• A one-off transaction

With a financial planner you can expect:

• Advice focused on your life and goals as well as money/investments, answering “How can I achieve this in life?”

• A long-term relationship, helping you plan for your future

• Help building a financial roadmap, with minimal focus on products

• Ongoing advice, meeting frequently to review your plan

What are we?

At Stephen Eve Financial Planning, we consider ourselves financial planners. That includes our lead adviser, Ben. We have been known to refer to ourselves as advisers, as many planners do, since it is an age-old term. However, our holistic service is more closely aligned to a financial planner.

To put it simply, we create plans that cover:

• Where you are today

• Where you want to be

• A financial strategy to get you there

Regulation

Unlike other countries, in the UK, the title of financial planner can be used by any financial adviser. UK financial planners don’t need to specialise in planning – they just need to offer accredited financial services. 

That means someone may have the skills to offer advice on pensions, bonds, equities, protection and other wealth management areas, but is not trained to coach clients, using finance to meet life goals.

To ensure you receive a high quality service, we would advise working with a Chartered Financial Planner. Our lead adviser is proud to be a Chartered Financial Planner and member of the Personal Finance Society (leading professional body for the financial planning community), delivering the gold standard of financial planning for clients.

All Chartered Financial Planners have completed degree-level qualifications and have at least five years’ relevant professional experience. They are also required to evidence adherence to the code of a valid Statement of Professional Standing. This confirms that they are professionally qualified, adhere to a code of ethics, and commit to ongoing professional development.

In summary

There is no right or wrong answer when it comes to picking an ‘adviser’ or ‘planner’. The best solution is choosing someone who aligns to your objectives and personality.

If you don’t want to consider the ‘bigger picture’, and need advice in setting up an ISA or GIA for example, an adviser may be best for you.

However, if you have goals such as a change in career, new home, business purchase/sale, retirement and more, a financial planner is best placed to help you get there.