The job of financial planners is to help their clients save money, invest money, and grow money. But though financial planners are involved with recommending securities, they are not the same as stockbrokers. And though financial planners may direct their clients’ finances, financial planners are not accountants. Here we will take a closer look at the differences between the roles and focuses of financial planners, stock brokers, and accountants.
The most common credential financial planners obtain is their CFP (certified financial planner) designation. The CFP indicates that the financial planning professional who obtained it has passed a set of rigorous tests and commits to acting in a professional and ethical manner. They also agree to periodically obtain continuing education credits by taking classes designed to help them stay abreast of relevant financial matters.
Financial planners, unlike stockbrokers, have your overall economic picture in mind. So while a stockbroker is more concerned with helping you make a profit or prevent a loss through buying and selling certain kinds of securities and options, he or she does not take your overall financial picture into account. Therefore your stockbroker is unlikely to say “don’t invest your child’s college fund in that stock because it’s too risky.” It’s simply not their job to worry about such considerations. On the other hand, it is a financial planner’s job to take such considerations into account.
A financial planner is unlike an accountant in that accountants generally do not concern themselves with how to generate income or prevent loss. Accountants typically work to account for funds which have already been allocated and to provide an easy to understand representation of such funds, including taxes. So while an accountant is primarily only concerned with the dollars and cents of what’s going in and what’s going out, their job is not to help a company meet desired or projected income, or to help prevent loss.