Difference Between Investment Advisor & Financial Planner

Though investment advisors and financial planners aim to assist clients with their money, there are differences between their salaries, job outcomes, and overall focuses.

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Comparing Investment Advisors to Financial Planners

People want to know their money is safe, and investment advisors and financial planners are the ones who help with that. Although investment advisors deal with stocks and bonds, financial planners have a greater overall reach regarding the monetary advice they provide.

Job Title Educational Requirements Median Salary (2016)* Job Growth (2014-2024)*
Investment Advisors Bachelor's Degree $81, 760 12% (Financial Analysts)
Financial Planners Bachelor's Degree $90,530 30% (Personal Financial Advisors)

Source: *U.S. Bureau of Labor Statistics

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Responsibilities of Investment Advisors vs. Financial Planners

Investment advisors and financial planners can help businesses and individuals make sound decisions with their money. Investment advisors focus on the ways people can invest their money to make it grow. Financial planners do this as well, but they also deal with tax information and budgeting. Though both of these professions require someone willing to connect with new clients, while also maintaining relationships with existing clients, investment advisors can make investments on behalf of the client. Financial planners, on the other hand, can assist with everything from insurance to savings.

Investment Advisors

When a client wants to buy or sell stocks in a company or invest in bonds, investment advisors are there to provide guidance. By studying economic trends and the newest investment strategies, these professionals help clients build portfolios. The ability to apply qualitative and quantitative analysis to investment opportunities is essential for investment advisors, as this allows them to examine a company's finances and determine if it is safe for a client to invest in it. An understanding of foreign markets, as well as other cultures and businesses practices, can also be important when assisting company mergers or an investment in one company by another.

Job responsibilities of an investment advisor include:

  • Marketing to new clients through investment seminars
  • Keeping clients updated on successes and sales or purchases on their behalves
  • Teaching businesses how to analyze their own financial well-being
  • Writing reports for company leaders based on data analysis and assessments of management teams

Financial Planners

Banks and other financial institutions offer many financial services to clients, and it is up to financial planners to explain these to the clients. Some examples of these services include saving for a child's education, choosing the best home or car insurance, and estimating the amount of tax that will be withheld at the end of the year. By meeting with clients, financial planners learn their financial and investment goals. Based on the needs of the client, these professionals can help manage large estates or even debt and repayment. If anything in the client's life changes, such as marriage or the opening of a new business, it is the responsibility of the financial planner to account for this and adapt the financial plan.

Job responsibilities of a financial planner include:

  • Recommending investments based on a client's current financial standing, as well as his or her goals
  • Clarifying any risks related to an investment so the client is aware
  • Taking detailed notes during meetings with clients to maintain updated files
  • Building quarterly investment reports for the companies that employ them

Related Careers

If a career as an investment advisor interests you, you may want to look into a job as a certified financial manager, as both assist companies in expanding. On the other hand, if a position as a financial planner seems like the job for you, you may want to also research a career as a budget analyst, because both of these require a close look at spending and saving.

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