The title “financial planner” is strictly limited and regulated in many countries. However, this is not the situation in the United Kingdom.

In the United Kingdom, any financial adviser may call themselves a financial planner, regardless of whether they provide financial planning services or not.

What is the difference between a financial adviser and a financial planner? The primary distinctions between a financial adviser and a financial planner are explained further below. Continue reading!

What Does a Financial Advisor Do?

A financial advisor’s key responsibilities include establishing a pension, selecting an investment, and selecting an insurance provider.

Most financial advisors don’t focus on your long-term horizon. Instead, they take a restricted view of the subject, only advising you on what you asked.

For example, you may want to know how to invest a lump sum for the long term. A financial advisor will evaluate your alternatives and propose the best investment strategy for you. This approach may overlook something vital since they are not looking at the complete picture with this approach. Investing the entire cash may not be the most excellent decision. What if you need to use it for anything else, like your child’s tuition, a few years from now?

Financial advisors are valuable, but they do not answer the key questions. “Will I be okay?” “When can I afford to retire?” and “How much money can I spend in retirement?”

Another issue with financial advising is the emphasis on financial products. Many advisers only get paid if they propose a particular product, such as an ISA, a pension, or another type of investment.

How much does it cost to hire a financial advisor? Typically, they will charge you 2% to 3% of your investment. So, if you have £200,000, they will most likely charge you around £5,000.

How About Financial Planners?

A financial planner works typically as an independent adviser. They advise you on the big questions like “how much can I spend in retirement” and “how much will I need to save”.

A financial planner will look at your whole financial situation, not just the bit that you’ve asked them to. A financial planner will consider what’s best for you; your financial situation, personality, attitude to risk, and goals. They do this because they don’t get paid unless you get a good result. This means that a good financial planner is really on your side. They won’t try to make a quick buck at your expense.

A financial planner will also help you make good decisions and support you through your financial decisions. A good financial planner will know you well enough to help you when you need it. They will know your attitude to risk and your spending habits.

A financial planner will also be on hand when you need advice. In between meetings, they’ll be there to support you when you are making financial decisions. A financial planner will also help you stick to your plan. This is important because it’s too easy to stray off course. Financial planners will help you by reviewing your financial plan each year. They will help you to take the proper steps.

What does a financial planner charge? You will usually pay a fixed fee for a financial planner. This can be a yearly fee or a fee for each financial plan (usually about £1,000).

Which One Do You Need?

Financial advisors and financial planners are both valuable. A financial advisor can give you recommendations for the specific solutions you are looking for. They are great for things like saving for a house deposit or retirement. A financial planner will give you a view of the bigger picture. They will consider what’s best for you and lead you towards your goals, not just the products they can sell you. Even if you start with a financial advisor, you should think about a financial planner. They will help you to make the right decisions.

Wills and Probate is here to help inform you of the most important decisions you make in life, especially concerning your wealth and finances. Whether you need help with inheritance tax, power of attorney, or retirement planning in the UK, our team of legal professionals are here to assist you. It’s never too early to plan your future, so you better start doing it today. Contact us to set up a free consultation.