{"id":17939,"date":"2023-08-29T15:52:39","date_gmt":"2023-08-29T15:52:39","guid":{"rendered":"https:\/\/www.guru.com\/blog\/?p=17939"},"modified":"2023-08-29T15:54:35","modified_gmt":"2023-08-29T15:54:35","slug":"what-is-a-financial-consultant-versus-a-financial-advisor","status":"publish","type":"post","link":"https:\/\/qa-wp.guru.com\/blog\/what-is-a-financial-consultant-versus-a-financial-advisor\/","title":{"rendered":"What Is a Financial Consultant Versus a Financial Advisor?"},"content":{"rendered":"\n

You\u2019ve likely heard the terms ‘financial consultant’ and ‘financial advisor’ used interchangeably. These broad job titles both apply to professionals who help their clients (individuals and organizations) understand their assets and manage their money. <\/p>\n\n\n\n

Technically, there is no legal distinction between financial consultants and financial advisors. On the surface level, they achieve the same goals. However, there are some key differences.<\/p>\n\n\n\n

What Is a Financial Advisor?<\/h2>\n\n\n\n

Financial advisors provide advice to individual clients on how to achieve their unique financial goals. This often looks like creating a personalized financial plan, accounting for the client\u2019s current financial situation, risk tolerance, and financial goals. They typically help with retirement planning, investment portfolios, estate planning, and insurance planning. <\/p>\n\n\n\n

They can also offer investment products like mutual funds and annuities. Financial advisors can receive a commission on the sale of these products, but they still must abide by fiduciary duty\u2013meaning that they must provide professional advice that is within their clients\u2019 best interests. <\/p>\n\n\n\n

What Is a Financial Consultant?<\/h2>\n\n\n\n

Freelance financial consultants<\/a>, on the other hand, provide advice on finance to a wider range of clients\u2013non-profits, government agencies, and businesses, for example. They are hired to provide a wide range of financial planning services, including tax planning, risk management, and business planning.<\/p>\n\n\n\n

Financial consultants can provide insights and services to individuals, but it\u2019s more common for them to provide their expertise to a larger scope. They can help organizations and individuals develop budgets, create plans for reducing debt, and provide advice on risk management, and tax planning services.<\/p>\n\n\n\n

What\u2019s the Difference?<\/h2>\n\n\n\n

When you consider that everything a financial advisor provides can also be offered by a financial consultant, it feels like the line differentiating the two is very thin. That\u2019s because it is. The difference is truly a ‘devil in the details’ situation. Let\u2019s explore what really makes these two positions differ:<\/p>\n\n\n\n

Licensing Requirements<\/h3>\n\n\n\n

While it isn\u2019t required for financial consultants or advisors to have licensure or credentials, financial consultants more commonly have them. The most common designation for either position is the certified financial planner (CFP). Financial consultants can also pursue a chartered financial consultant (ChFC) designation.<\/p>\n\n\n\n

Additionally, some of the activities required for both positions require specific licensures. Financial consultants generally pursue these so they can offer a wider range of services to their broad scope of clients. This includes a Series 7 license, which allows them to sell securities and facilitate securities transactions.<\/p>\n\n\n\n

Services Offered<\/h3>\n\n\n\n

Financial advisors will generally gear their financial planning towards individuals, offering a more personalized experience for their clients. These services focus on:<\/p>\n\n\n\n