Most people in the UK are familiar with the term ‘financial adviser’. They understand that it’s a person they can speak to if they need advice on their finances.

The term ‘financial planner’ is less well-understood. As a financial planner myself, clients often ask me what I do and how my role differs from that of a financial adviser. It doesn’t help that the job titles are commonly used interchangeably.

The services offered by financial advisers and financial planners are actually very different, so I thought it would be worth highlighting these differences and explaining what they mean for you.

Whether you’re deciding which type of professional is right for your circumstances or you’re wondering what additional areas I can help you with, read on to discover the ins and outs of financial advice and financial planning.

A financial planner looks at the big picture

If you go to see a financial adviser, they’ll usually concentrate on one or two areas or problems. So, they might advise you on which pension you should start, which investments are suitable, and how your savings could be more tax-efficient.

It’s a product-driven approach that focuses on finding a specific solution to a specific problem. At the end of your meeting, you might come away with a stand-alone financial product.

In comparison, a financial planner such as myself will look at the big picture. Instead of just telling you how best to invest your money, financial planning is about determining your life goals and then putting a plan in place that helps you achieve those goals. I’ll ask about your life right now and what you want it to look like in the future.

Once I’ve found out what motivates you and why, I’ll create a comprehensive, personal financial plan that helps make your dreams a reality. This plan will consider every aspect of your finances – from your spending and savings habits, to your investments, pensions, protection and estate planning needs. I’ll use cashflow modelling to forecast your finances and help you prepare for the future.

While I might recommend specific products, these are simply the means to an end, and not an end in themselves. I’ll find out why you want to invest, rather than just recommend which ISA to open. It’s a much more holistic and comprehensive approach than the one offered by a financial adviser.

A financial planner provides ongoing support

If you get advice from a financial adviser, it will often be a one-off meeting that is transactional in nature.

In contrast, a financial planner will provide ongoing support for as long as you want and need it. As a result of this long-term approach, financial planners tend to build much closer relationships with their clients.

The value of ongoing support shouldn’t be underestimated. A report by the International Longevity Centre, published in 2017 and updated in 2019, found receiving financial advice between 2001 and 2006 resulted in a total boost to wealth of £47,706 in 2014/16.

However, people who received advice at both time points in the analysis had nearly 50% higher average pension wealth than those only advised at the start.

A financial planner can act as a sounding board during uncertain times

The long-term nature of financial planning means I can help to guide clients through difficult times. The year 2020 has been extremely challenging, however, I hope that by offering ongoing support I’ve helped to alleviate my clients’ concerns.

Research suggests people who feel confident and secure about their finances have a greater sense of wellbeing. For example, a 2017 survey by the charity Money and Mental Health found 67% of people who were finding things financially difficult reported at least one sign of poor mental health, compared with 41% of those who were financially comfortable.

Sometimes, financial planners can act as a type of behavioural coach. In uncertain times, it’s easy to make knee-jerk reactions with your money, which may prove detrimental in the long run. By helping you focus on your financial plan and goals, I can prevent you from making emotional decisions that could damage your wealth.

A financial planner puts you in control of your finances

The additional support offered by a financial planner can help you feel more in control of your finances. You’ll have a roadmap that shows where you are today, where you want to be in the future, and how you can get there.

You can ask a financial planner big questions like, ‘Will I have enough money at retirement?’, ‘Will my investments provide enough money to do all the things I want to achieve?’ and ‘Will my family be taken care of after I’ve gone?’

By guiding you through these questions, a financial planner can help you feel more confident about your financial future.

Get in touch

As a financial planner, I can give you the peace of mind that your financial future is taken care of. By understanding your goals, developing a personal financial plan, guiding you through difficult times, and providing ongoing support, I’ll help you live the life you want with confidence.

To find out more about how I can help you, email info@macfp.co.uk or call 01349 832849.