What’s the Difference Between a Tax Planner, Financial Planner and Financial Advisor?

Daniel Penzing
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Tax Planner

Vs Financial Planner vs Financial Advisor (what’s the difference?)

A lot of people don’t know there is a difference!

Tax Planner

A tax plan is a systematic and organized arrangement of all the receipts and expenditures pertaining to income tax. A tax plan helps a taxpayer organize his deductions and get the maximum benefits from his income.

Financial Planner

A financial planner is specialized in making financial plans for individuals and families. They take into account the overall expenses of the individuals, their financial situation, their income sources and other regular expenditures. They are also responsible for making sure these families are financially stable. These financial planners are also responsible for making certain that the plans put into place are affordable for the families.

Financial Advisor

A financial advisor is a marketing term commonly used to describe stockbrokers and insurance salesmen who have paid large sums to a company for the right to use their office space and sales literature. They are not necessarily trained in financial planning. They may be from sales jobs within large companies or they may come from various sales jobs or sales training programs.

So who should you go to? A tax planner, a financial planner or a financial advisor?

Financial Planner

Vs. Financial Advisor vs. Tax Advisor

The financial services industry is a massive part of our economy. In fact, in the US alone there are over 10 million financial services sales representatives. What is a financial services sales representative though?

Well, in the financial services industry, a sales representative is often referred to as a financial advisor, or more recently as a financial planner. There are also other titles for financial advisors including financial consultant, financial specialist, financial executive and even financial management consultant.

The Role of a Financial Advisor

In the financial services industry, the role of a financial advisor is to provide advice and counseling to individuals and businesses. At its most basic level, the role of a financial advisor is to help clients navigate life and financial issues, such as retirement planning, college planning, estate planning, credit issues, health care, insurance, and tax planning.

Financial professionals who choose to be called financial advisors (as opposed to financial planners) may consult with individuals, families or business owners in order to help them build a plan to reach their financial goals.

As a financial professional, you have many titles, and many of them are not regulated by the U.S. Securities and Exchange Commission (SEC). Depending on your degree, state, and industry specific credentials, you may call yourself a financial planner, advisor, consultant, or financial executive.

Financial Advisor

Most people use the terms financial advisor and financial planner interchangeably. They are not the same and should not be used interchangeably. While advisors are planners, planners are not advisors. To start off let’s define what a financial advisor/planner is.

A financial planner or financial planner assists individuals and families in their financial decisions. Their goal is to help individuals and families to make sound financial decisions. They help you plan and organize your financial future and help you reach your goals.

Financial advisors will do the following:

  • –Assess your financial situation by setting up a financial plan. ―—
  • –Analyze your current assets and liabilities and help decide on a course of action. ―—
  • –Recommend and help you implement the necessary changes in order to achieve your financial goals. ―—
  • –Provide financial education to you and advise you on specific investments. ―—

Do You Need All Three Types of Services?

While their job titles might be different, they have similar responsibilities. Start with tax planner. With a Bachelors Degree, they take care of calculations of various things like deductions, tax planning and preparing tax returns.

Though they are not considered to be financial planners, they must have a good working knowledge of how taxes work.

Financial planners are not only responsible for helping you manage your present situation but, they are also tasked with ensuring a financially stable future.

They deal in a lot of different areas such as investments, real estate and retirement planning. Not all financial planners take care of everything.

Looking at the fields they are relying on, some specialize in stocks and bonds, others specialize in private or public funds and some take care of insurance.

Financial planners are also known to help negotiate mortgages for their clients.

They take care of:

Investments – Retirement Planning – Estate Planning

They are also the ones who help you set goals and they do the research, they plan and direct the path to help the investor get from a place of where he or she is right now to their ideal end goal.

Financial advisors are usually known to help with investments and the sale of investments. They look at the assets of an individual, and they try to help that individual grow that asset. They are known to do things like a retirement plan and they specialize in insurance as well.