Comparing Financial Advisors to Brokers
Whether it be for an individual or a corporation, both financial advisors and brokers both provide imperative insight regarding the finances and investments of an entity. The primary difference between these two careers is financial advisors assist in the planning, management, and investments that a client already has, while brokers primarily deal with assisting potential stockholders in potential investments that would prove to be lucrative to the client.
|Job Title||Education Requirements||Median Salary (2016)*||Job Growth (2014-2024)*|
|Financial Advisor||Bachelor's degree||$90,530 (for all Personal Financial Advisors)||30% (for all Personal Financial Advisors)|
|Broker||Bachelor's degree||$67,310 (for all Securities, Commodities, and Financial Services Sales Agents)||10% (for all Securities, Commodities, and Financial Services Sales Agents)|
Source: *U.S. Bureau of Labor Statistics
Responsibilities of Financial Advisors vs. Brokers
Financial advisors and brokers are involved in financial management and investments, typically hired on an as-needed basis for companies or individuals. Advisors provide assistance maintaining funds and how possible investments will affect a client's finances, while brokers buy and sell property or stakes in companies for clients. Though there may be some crossover in some of their duties, such as financial advisors researching and buying stocks, the motives behind these duties are what keep the two careers distinct. Brokers deal specifically with products or property and are constantly researching the marketplace of the applicable industries for these products. Financial advisors' research of these markets are usually through the lens of their clients' current financial status, information that brokers may not have access to.
Financial advisors are hired to assist their client in managing various aspects of their affairs, such as insurance, contracts, taxes, balance sheets, and budgeting. They are usually consulted to analyze each facet of these affairs and create a plan to improve their client's financial growth and meet whatever goals the client may want to achieve in a specific time frame. They also look over any potential investments or industry climates their clients are interested in pursuing, to best advise them on what would be conducive to the client's funds and brand. Financial advisors may also be given the authority of purchasing stocks or bonds on the behalf of their client, if they are licensed to do so. In addition to these duties, financial advisors are also responsible for:
- Finding lucrative investment opportunities
- Monitoring accounts and spending habits of their client
- Suggesting changes in the budget that will benefit the client
- Creating alternate plans for possible financial circumstances or emergencies
Brokers are responsible for researching and understanding the ever-changing climate of the stock market as well as various industry fields pertaining to products such as stocks, bonds, and property. Similar to financial advisors, brokers assist clients in making financial decisions based on their current financial state, however this assistance only pertains to the buying or selling of stock, since brokers usually have more specialty knowledge in the marketplace. They are also responsible for purchasing or selling stocks that meet the needs of their client, if given prior permission to do so. Brokers are also consulted while working for a financial institution, therefore their pay may be affected by how many clients they are able to buy stocks for, rather than by the hour or salaried. Brokers are also tasked with:
- Examining and evaluating any financial information provided by their client
- Ensuring that their clients needs are met by the products offered by their institution
- Protecting the sensitive materials of their various clients
- Documenting any purchases or sales that are completed on their clients' behalf
A potential career similar to financial advisor is a financial research analyst, since they examine the finances for the betterment of a client or organization. Real estate brokers are similar to stock brokers, since they must have a great understanding of the real estate market to meet the needs of their clients.