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Financial advisor vs. financial planner
What is the difference between a financial advisor and a financial planner?
In many countries, the use of the title 'financial planner' is strictly controlled and regulated. However, here in Britain this is not the case.
In Britain, any financial advisor can call themselves a financial planner, regardless of whether he or she actually offers onefinancial planning service.
What does a financial advisor do and what does a financial planner do? The key differences between a financial advisor and a financial planner are summarized below.
Do you want to know more? Read on to discover the difference between a financial advisor and a financial planner.
What does a financial advisor do?
The most important thing a financial advisor does is create onepension, choose oneinvestmentor choose an insurer.
A financial advisor, even an independent financial advisor, tends to focus on a single problem. They don't take the big picture into account. Instead, they will review the matter closely and only advise you on what you requested.
For example, you may want advice on how best to invest a lump sum in the long term. A financial advisor will consider and recommend the optionsbest investment strategy.The risk with this approach is that, without looking at the big picture of your finances, they may miss something important. Maybe investing a lump sum isn't the best idea. What if you need to use it for other reasons?
Financial advisors are important, but they don't really answer the big questions. Things like “Am I okay?”, “When can I afford to retire?” and “How much can I spend on pension?”.
The second problem with financial advice is the focus on financial products.Many advisers only get paid if they recommend a particular product, whether it's an ISA, a pension or another investment.
How much does a financial advisor cost? They normally charge you 2 – 3% of your investments. So if you have £500,000 they will probably charge you between £10,000 and £15,000. Our costs are much lower, read on to find out.
What does a financial planner do?
An independent financial planner looks at the 'big picture' of your finances and makes a planholistic approach to financial planning. A financial planner will help you figure out what you want out of life and then create a financial plan to make it happen.
The main difference between a financial planner and a financial advisor is that a financial planner focuses on you and your goals, while a financial advisor focuses on your money and your investments. Financial planners use their expertise in taxes, budgeting, retirement and investments to create an overall strategy for your finances.
Working with an independent financial planner gives you control over your finances, giving you clarity and confidence about your financial future.A financial planner creates a financial plan that provides a roadmap for your financial future. The financial plan shows you three things:
- Where you are today
- Where you want to be
- A strategy to get you there
The financial strategy may include financial products such as an ISA or a pension; but these are just tools to get the job done.
How much does a financial planner cost for the initial financial plan?
Most independent financial planners work with a fixed rate for initial advice.The exact costs will depend on the complexity of your circ*mstances. For reference, our fees are €2,000 – €3,000 for the initial financial plan and assessment. This includes:
- Financial plan– a forecast of your finances (income, expenses, assets and debts). This will show you how to best achieve your goals, both now and in the future.
- Economic overview– a complete overview of your finances (pensions, investments, insurance and taxes). Creating an overall strategy for your finances.
Once their financial plan has been created, they can continue to seek detailed financial advice. The average fee for advice is between €2,000 – €3,000, depending on the complexity. This includes:
- Financial advice– a comprehensive report in which you clearly give our advice on what you should do to improve your financial situation.
- Implementation– we create your new accounts and arrange the transfer of existing accounts if necessary.
In most cases, hiring a financial planner offers better value for money. By working with a financial planner you get a complete overview of all aspects of your finances. In addition to a personal financial plan, you will receive a complete overview of your tax position, pensions and investments and advice on how these can be improved.
How much does a financial planner cost for ongoing advice and management?
When you hire a financial advisor, you are not just paying for investment management; you are investing in a relationship that provides proactive, ongoing guidance as you navigate the financial landscape. For a fee of up to 0.90% of your investments per year, the services provided are extensive and tailored to your unique situation, including:
- Proactive planning:We continually anticipate potential changes in the market and your life, and proactively adjust your financial plan to keep you on track toward your goals.
- 24/7 availability:There are no office hours for your financial well-being. That's why we offer 24/7 access to your advisor, so you get support when you need it.
- Unlimited Support:Whether you have big decisions to make or simply need reassurance, you have unlimited access to your advisor for advice and guidance.
- Regular reviews:We regularly review your financial plan to make sure you're on the right track and adjust it as your life and goals evolve.
- Tax optimization:Strategic advice to improve your tax position and keep more of your hard-earned money in your pocket.
- Adequacy of insurance:Make sure there is enough coverage to protect you and your family, no matter what life throws at you.
- Retirement planning:Reviewing your retirement income strategy to reduce the risk of running out of money in your later years.
- Investment monitoring:Constantly monitor your investments to ensure they perform as expected, making adjustments as necessary.
- Hassle-free administration:Handling all the administrative tasks associated with managing your finances, giving you one less thing to worry about.
At Frazer James we believe that a small investment in expert advice can yield significant returns, both financially and securely. Our aim is to ensure that every aspect of your financial life is carefully managed and controlled, so you can focus on the life you want, safe in the knowledge that your financial health is in expert hands.
What suits you?
If you just want to set up an ISA and don't want to consider the 'bigger picture', it's probably best to work with a financial advisor.But if you want to take control of your finances and have a plan for your future, financial planning is the way to go.
In our experience, most people think they want a financial advisor, but what they need is a financial planner. No one wants to invest money for money's sake, there is usually a reason for that. Working with a financial planner provides clarity about where you are today and where you want to be, so that any advice is in your best interests.
If you want someone who really understands financial advice and planning, you may want to consider hiring oneCertified Financial Planner(CFP). This is a feature of global financial planning standards.
At Frazer James we provide financial planning and advice. If you would like to know more, you are very welcomeschedule an initial financial consultation.
All the best,
James Mackay, independent financial advisor in Bristol
P.s – here's a short customer story about itthe differences between a financial planner and a financial advisor.
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Financial advisor Bristol and pension advisor Clifton
Frazer James Financial Advisers is an independent financial advisor based inClifton,Bristol.
About us: Frazer James Financial Advisers is a financial advisor based in Clifton, Bristol. As an independent financial advisor, we are able to provide you with independent and impartial financial advice. We provide independent financial advice, pension advice, investment advice, inheritance tax planning and insurance advice.
If you would like to speak to AFinancial Advisor, we offer aFirst financial consultationwithout costs or obligations. The meetings take place at our office, via video or by telephone. Our telephone number is 0117 990 2602.
Frazer James Financial Advisors is located atSquare Works, 17 – 18 Berkeley Square, Bristol, BS8 1HB.
This article provides investment information, but not personal advice.If you are unsure which investments are suitable for you, please seek advice.
Please note that investments can rise and fall in value; you may get back less than you put in.
