Financial Advisors - The Primer Part 6

Part 5 is Here

Types of Financial Advisors and Financial Planners

You may have noticed that throughout this primer I've said "financial advisors and financial planners" numerous times.  Mostly this is just to cover the bases.  Although there should be a way to discern what someone does by their title, it just doesn't work that way.  People call themselves whatever they think sounds the best.  Chances are their company has a little bit to say about that, but some companies are more stringent than others, so you never know.

Here is how to sort out who is who.

Financial Advisor vs. Financial Planner

A financial planner technically should be someone who is doing financial plans.  No kidding, right?  A financial plan does not have to involve investing.  A financial plan is about goals, and time frames and math.  A financial plan is a document you get.  Usually it comes in a binder several inches thick.  The first inch is your actual plan the other four inches are the legally required disclosures.  That is it.  Theoretically, you could walk out of the office with the plan and go do everything yourself by following the document.  That is a financial planner.

A financial advisor is someone who gives you advice on your finances.  Again, no kidding.  This is more a function of answering questions and making suggestions regarding your financial situation. Notice that there is no plan to take with you.  You might have a sheet of notes, or maybe even some printed pages and calculations, but not a big binder with the whole plan.

Right about now, you are thinking that neither one of these people is right for you.  You need a plan, but you also need someone you can count on to answer questions that come up, or to help you with just the things that you can handle today.  Also, it would be nice if the same person could not only tell you what you need, but get it for you too.  And this is where your best financial advisors/planners come in.

Most financial advisors and financial planners are also licensed to sell you whatever investment products you might need.  A good advisor will care about ALL of your finances, not just the parts where he can sell you something.  That means, they want to know about your car payments, and your credit cards, not because there is anything they can sell you, but because if you are paying 22% on a credit card, then they need to know. Because, if you are making the wrong decisions in your every day life, your long term plan will never work out either.


Anyone who only wants to look at part of your situation or seems focused mainly on one part is not a financial advisor or planner.  Anyone who wants to sell you one product FIRST is not an advisor or planner.  Both advisors and planners should be able to help you with your needs in the order in which you need them, not according to what they have first on their list.

The End but Not The End

A primer by it's nature is a basic introduction to a complicated subject.  The world of financial advisors is actually pretty complicated.  Do not end here.  Keep reading.  Check over the advice in the Financial Advisors and Financial Planning sections, and keep coming back. I've got dozens and dozens of articles coming on everything from how to find a good financial advisor, to how much to pay, to how much you can do on your own, and so on, and so on.  The basics you got here will be the framework for those articles.

In the mean time feel free to email me your questions