Will a consultant or financial advisor bring in more?

financial advisor vs financial advisor

Financial advisers and financial consultants are widely interchangeable job titles for finance professionals who help individuals and organizations manage their money. A person with either title can help prepare and execute strategies for budgeting, saving, investing, retirement planning, risk management, borrowing, and estate planning. Consultants are sometimes described as more likely to provide services to their clients for a limited amount of time, while advisors are more focused on the long term. If you’re looking for help with your long-term financial plan, consider find the right financial advisor work with you.

Understand the roles of financial advisors and consultants

Financial professionals called financial advisors or financial advisors help individuals, businesses, trusts and other entities make decisions about money. This can include a wide range of services, from preparing a emergency fund developing a succession plan for a business owner. They can help with budgeting, borrowing, investing, retirement planning, managing taxes, philanthropic activities, and almost any other activity involving money.

License requirements

Financial advisors and consultants do not have legal or licensing requirements like some professionals such as doctors and lawyers. Anyone can call themselves a financial advisor or financial consultant. However, most people who use these job titles have college degrees and many have additional specialized training to earn designations such as certified financial planner.

Certain activities carried out by financial advisers and consultants, such as the sale of securities, require licenses. For example, the Series 7 license allows them to sell securities. Securities brokers, who are financial professionals focused more on facilitating securities transactions than providing financial advice, also need licenses such as Series 7 to do their jobs.

Registered Investment Advisor (RIA) is an official title for a person registered with the Securities and Exchange Commission. RIAs manage the assets of their clients and may be required to obtain a license from the state where they operate. RIAs must follow fiduciary duty standards and provide public documents outlining their fees and services.

Differences Between Financial Advisor and Financial Consultant

financial advisor vs financial advisor

financial advisor vs financial advisor

Perhaps the biggest difference between financial advisors and financial advisors is that there are many more financial advisors working today. Any online search for the terms generates several times more public mentions for financial advisers than for financial consultants when it comes to both open jobs and the role itself.

Within individual organizations, one term may be preferred as a job title over another. For example, the job title at Schwab is consultant. Vanguard refers to people doing similar work as advisors. Within some organizations, a person providing financial advice as a consultant may not have to solicit new clients as part of their job, while an adviser who otherwise does much the same work should also attract new business.

Another indication of the relative frequency of occurrence of the two terms is the names of financial advisory firms. Several of best companies in the field identified by SmartAsset call themselves “advisors” or “advisory” companies, while none use the term “consultant” in their business names.

Duration of commitment

Sometimes a consultant may be considered more likely to provide services to a client over a limited period of time. For example, a consultant may help a business owner with the one-time sale of the business. An advisor, on the other hand, can work with clients over a long period of time, helping them achieve long-term goals like saving for retirement. However, these are tendencies and not absolute distinctions.

Pay for open positions

Job boards can advertise vacancies using either term. Indeed.com, for example, posts both financial consultant and financial advisor positions. The two job titles also have a similar base salary, with Advisors earning an average base salary of $74,987 and Consultants earning an average of $78,505. However, consultants also average an additional $20,000 in commissions, according to the job posting site. This may not be a true apples-to-oranges comparison, as many financial advisors work in their own businesses and these salaries are not posted.

Conclusion

financial advisor vs financial advisor

financial advisor vs financial advisor

Financial advisers and financial consultants provide advice to clients regarding their money and there is no clear distinction between the two titles. Each can help individuals or organizations with budgeting, investing, insurance, tax management, estate planning and other needs. Financial advisors are generally easier to find than financial consultants, but within businesses one term may be preferred over the other. No job title requires a license or necessarily involves specialized expertise, but many advisors and consultants bring extensive training, experience, and prestigious certifications to the job.

Financial Planning Tips

  • Whether you end up with someone calling themselves a financial advisor or a financial consultant, professional help with financial decisions can help you achieve your goals. Finding a financial advisor doesn’t have to be difficult. SmartAsset’s free tool connects you with up to three financial advisors who serve your area, and you can interview your advisors at no cost to decide which one is best for you. If you’re ready to find an advisor who can help you achieve your financial goals, start now.

  • In addition to financial adviser and financial advisor, other similar job titles include wealth manager, investment manager, and financial planner. Although each of them may provide somewhat different services, the differences are not clearly stated or universally followed. Ultimately, the only way to know what a finance professional can do for you may be to ask for details.

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