Are you hoping to establish a career in finance? If so, you might have your sights set on becoming a financial planner, or a financial advisor – both great options for anyone with an aptitude for facts and figures.
Although the terms ‘financial planner’ and ‘financial advisor’ are often used interchangeably, there are important differences between these two professions.
Keep reading to find out what the difference is between a financial planner and a financial advisor, so you can decide which of these career trajectories is best suited to you. We’ll also look at educational requirements and salary expectations.
What’s the difference between a financial planner and a financial advisor?
So, financial planner vs advisor: how do these positions differ, and which is best? In a nutshell, the main difference between a financial planner and advisor is that financial planners tend to form long-term relationships with their clients. While a financial advisor might provide guidance for a client at a specific point in time, financial planners tend to work with their clients over longer periods.
Let’s compare the major points of difference between the two:
What is a financial planner?
Financial planners help individuals and organisations develop plans to help them achieve their ‘big picture’ financial goals. Financial planners can choose to specialise in areas such as retirement, estate planning, investments or taxes.
The roles and responsibilities of a financial planner can include:
- Financial analysis
- Investment management
- Goal-setting and planning
- Risk assessment
- Insurance planning
- Tax planning
What is a financial advisor?
Financial advisors are professionals who help clients with a wide range of money-related tasks. There are a number of career options for financial advisors such as banking, wealth management, estate planning, insurance professional and stockbroking.
The duties of a financial advisor can include:
- Brokering the buying and selling of stocks and funds
- Developing estate and tax plans
- Providing clients with suggestions about their investments
- Provide advice about saving money
- Managing investments
- Providing insurance advice
What qualifications are needed to become a financial planner or a financial advisor?
If you want a career in finance, the first step is to get a bachelor’s degree. It’s particularly important to get properly accredited as a Certified Financial Planner (CFP) or gain a certification from the Financial Planning Association of Australia (FPA) if you want to become a financial planner.
What qualifications does a financial planner need?
Swinburne Online offers a number of undergraduate programs that can lead into a career in financial planning, including:
If you want to broaden your career options and gain specialist skills, these postgraduate programs are great choices:
What qualifications does a financial advisor need?
A bachelor in business with a focus on finance and accounting is a great choice if you want to become a financial advisor. Swinburne Online offers two options:
Another way you can increase your earning potential is to complete a master’s program:
Studying for an MBA will give you higher level skills in economics and financial management, making you more attractive to employers and potential clients.
Should you become a financial planner or a financial advisor?
Now that we’ve looked at the key points of difference between a financial advisor and financial planner, you should be in a better position to decide which career you’d prefer. This table provides a comparison between the two professions, based on personality types and skills:
Who should become a financial planner?
Financial advisor vs planner: which is a better fit for you? A good place to start when approaching this question is to have a think about whether you’d like to have a close and ongoing professional relationship with your clients. Financial planners need excellent communication and people skills, since their job requires them to interact closely with clients to understand their financial goals.
As a financial planner, you’ll be responsible for creating comprehensive plans for your clients, and creating financial strategies that are customised in line with their long-term goals.
Who should become a financial advisor?
Financial advisors also interact with their clients, but with an approach that’s more centred around investments. Do you want to build long-term client relationships, or would you prefer to provide shorter term advice about areas such as retirement planning, insurance decisions and investment portfolio management? If your main passion is for stocks and investments, you’re probably more suited to a career as a financial advisor.
Are there salary differences between a financial planner and a financial advisor?
Salary differences between a financial planner and advisor in Australia will depend on your qualifications, amount of professional experience, and the specific firm or industry you work for. There can also be differences in the ways that financial planners and advisors are compensated. Generally, financial advisors earn an income through commission or fees, while financial planners often charge a percentage for managing a client’s finances (although they can also charge fees).
According to data collected by Seek (July 2023), salary expectations for a financial planner and a financial advisor are similar: both professions have an average annual salary of $110,000 to $130,000.