Difference Between Financial Advisor & Financial Planner

The word “advisory” has become a catchword in the financial industry. Because of the evolving financial market landscape, people need more sound advice than ever. Good advice can be the difference between growing your wealth and watching it slip away. But, finding a skilled financial expert takes some effort. 

Many people looking for direction for their money turn to expert professionals, but terms like financial advisor and financial planner can be confusing. Though both offer financial guidance, their roles and responsibilities differ significantly. 

Figuring out the difference between a financial planner vs advisor can help you make the right decision.

Who is a Financial Planner? 

A certified financial planner (CFP) is a professional often sought out to help form financial goals. They do this by mapping out a plan that covers comprehensive financial planning. 

1. Services Offered 

A financial planner is more focused on the big picture. The planner aims to focus on the individual’s long-term financial goals and how to achieve them. 

Some of the services offered by financial planners are:

• They examine their client’s financial situation and suggest a long-term financial plan to meet all the goals 
• They can plan for your retirement, do budget analysis, suggest investment plans and help with taxation matters 
• They also offer insurance and estate planning services in addition to the above services
• Planning for your child’s education expenses and other major life events is also part of their service

Note: Only SEBI-registered Investment Advisers (RIAs) may recommend specific securities (e.g., mutual funds, stocks) for a fee. Having a CFP certification alone does not authorize such advisory services under Indian law.” 

2. Credentials and Qualifications 

A planner holds certifications like Certified Financial Planner (CFP). In India, Certified Financial Planners (CFPs) are certified by the Financial Planning Standards Board (FPSB) India.

3. Fiduciary Duty 

Financial planners in India must put their clients’ interests first. 

4. Regulatory Framework

Financial Planning Standards Board Ltd. (FPSB India) regulates CFPs offering financial planning in India.  

Understanding Financial Advisor 

Many service providers use the label financial advisor. But that isn’t exactly correct. 

A financial advisor is an individual or a firm registered with SEBI that offers personalised investment advice on securities for a fee, acting as a fiduciary (client interests first). They are known as RIAs.

1. What are the Services Offered? 

It is fundamental to compare the services offered when discussing financial advisor vs financial planner differences. The financial advisor focuses more on overseeing a person’s investment portfolio. 

Services offered include:

• Suggesting or recommending investments based on the client’s financial goals
• Monitoring and reviewing the client’s accounts 
• Offering advice on asset allocation and portfolio construction  
• Providing insurance planning 

However, they cannot distribute products governed by SEBI unless separated from advisory activities.

2. Credentials and Qualifications 

SEBI RIAs must be registered under the SEBI Investment Adviser Regulations, 2013. They need to have a graduate degree and pass NISM-Series-X-A and X-B certifications. A CFP, CA or CFA designation holder can also register with SEBI to become an RIA. 

3. Fiduciary Duty 

SEBI RIAs follow fiduciary standards and act in the client’s best interest. They cannot sell investment products to earn commission. 

4. Regulatory Framework 

SEBI regulates registered investment advisors (RIAs) in India. RIAs must also sign a written agreement with every client, clearly stating the scope of services, fees, responsibilities, confidentiality clauses, and grievance redressal mechanisms.

Financial Advisor vs Financial Planner

Here’s a table to clear out the distinction between a financial planner vs advisor. 

Factors	Financial Advisor	Financial Planner
Tasks and Responsibilities	They focus mainly on investment management and wealth creation	They help in drafting and achieving comprehensive financial plans. They cannot recommend specific securities unless registered as a SEBI RIA.
Focus Area	Advisors focus on short and long-term investment strategies	Their focus is more on the overall long-term financial health of the client
Services Offered	Investment, taxation, insurance and retirement planning	Creating long-term plans, budgeting, investing, wealth management services, retirement, tax and estate planning
Certifications	SEBI RIAs	CFP
Best For	People who need investment advice and portfolio management	People looking for long-term strategy

When to Get a Financial Planner vs Advisor?

Figuring out when to get a financial advisor vs a financial planner is essential. 

Choose a financial planner when:

• You want to define long-term goals
• You need help with budgeting, insurance, or estate planning
• You are not looking for specific investment recommendations (unless they are an RIA)

Choose a financial advisor (RIA) when:

• You need securities-related advice (e.g., mutual funds, stocks)
• You want personalised investment management
• You prefer unbiased investment guidance

Pro Tip: Always verify whether your financial advisor is a SEBI-registered RIA if you are seeking investment advice.

Conclusion 

Managing your money and finance matters can be overwhelming. With vast online data, selecting the right expert for your needs is crucial. A financial planner helps you build a financial roadmap, while a SEBI RIA focuses more on investments and personalised investment advice. 

Knowing the distinction between a financial planner vs advisor and verifying their certifications and fee structure can help you pick the right expert for your needs. 

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