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What is the Difference Between Financial Planner and Accountant?
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As the financial world becomes more complicated day by day, it becomes difficult to handle on its own. Thus, there exists a team of experts who help you with going ahead financially and breaking free from money worries. They are accountants and financial planners.
Both these professions have more than average market outlooks, but there are differences between the two in terms of job profile and salary. To know more about accountant vs financial planner, read on further.
Who Is an Accountant?
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An accountant generally deals with the day-to-day cash flow in an institution or business. They usually record, analyse, summarise and prepare reports of all sorts of financial transactions.
At a certain time, public accountants who work for third-party firms review financial statements or the work of other accountants as well. This is done only when it is legally required by any publicly traded company.
They are usually detail-oriented and help your business in structuring your business, preparing and presenting tax strategies, preparing financial statements, etc.
Who Is a Financial Planner?
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If both accountant vs financial planner are considered, the latter is responsible for offering a holistic perspective on the financial future of a business. They help an individual or businesses in identifying their personal goals and maximise the opportunities for growth. They possess specialised knowledge in investments like cash, property, and a wide range of other alternatives as well.
A financial planner offers guidance for different wealth protection strategies that includes retirement, real estate planning, superannuation, etc. They are the best person to deal with if you are looking for opportunities for making a sound investment.
What is the Difference Between Financial Planner and Accountant?
Like every business, every profession is also unique and has its challenges. If you want to know the difference between financial planner and accountant, then follow this tabular guide below.
|
Parameters |
Accountant |
Financial Planner |
|
Qualification Required |
A bachelor’s degree is preferable but not mandatory. Along with this, CPA or Certified Public Accountant certification is required. |
A bachelor’s degree is preferable but not mandatory. Along with this, CFP or Certified Financial Planner certification is required. |
|
Roles and Responsibilities |
They maintain financial records, prepare budgets, and tax returns, provide advisory services for management, etc. |
They help clients with money management and assist them in meeting long-term financial goals. |
|
Duty of Care |
They are considered to have a fiduciary duty to their clients. |
For financial planners, it varies based on their licences. |
|
When to Hire |
For preparing a tax return, recording financial transactions, and preparing budget and financial reports. |
For reducing your overall debt, pick any investment strategy or individual securities. |
|
Work-Life Balance |
For an accountant, the busiest months are from January to April, while the remaining months offer a decent work-life balance. |
For the first few years, financial planners dedicate a lot of their time to find and sell clients. |
|
Salary |
It ranges between Rs. 0.6 lakhs to 6.0 lakhs with an average annual salary of Rs. 2.5 lakhs. |
An average salary of a financial planner is 3.4 lakhs per year. |
|
Required Skills |
An accountant must possess accounting organisational skills, time management skills, the ability to analyse data, proficiency in accounting software, etc. |
A financial planner must have a broad knowledge of banking, economics, and financial markets. |
Which One Is Better Accountant or Financial Planner?
If you need an income tax return to be prepared or have any tax-related queries, then it’s better to seek out help from an accountant. This is because they have advanced knowledge and training in tax-related services.
However, if you need help with more comprehensive services like real estate planning, business management, and investment management, then it’s better to hire a financial planner. They can help you with relevant suggestions and solutions that can help improve your financial life.
In terms of offering financial advice, both accountant and financial planner have similarities. However, an accountant primarily concentrates on the client’s tax needs, whereas a financial planner is an expert in resolving matters that are much more complicated.
FAQs About Accountant Vs Financial Planner
Can an accountant help with financial planning?
What are the four common types of financial planners?
The four most common types of financial planners are:
- Certified Financial Planner
- Investment and Wealth Advisors
- Asset Managers
- Financial Consultant
What are the three objectives of financial planning?
The three objectives of financial planning include:
- Determining your future needs in terms of investment, funds, and resources
- Determining the sources of the funds
- Managing or utilising these funds efficiently
Other Important Articles Related to Financial Planning & Analysis
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Disclaimer
- This is an informative article provided on 'as is' basis for awareness purpose only and not intended as a professional advice. The content of the article is derived from various open sources across the Internet. Digit Life Insurance is not promoting or recommending any aspect in the article or its correctness. Please verify the information and your requirement before taking any decisions.
- All the figures reflected in the article are for illustrative purposes. The premium for Coverage that one buys depends on various factors including customer requirements, eligibility, age, demography, insurance provider, product, coverage amount, term and other factors
- Tax Benefits, if applicable depend on the Tax Regime opted by the individual and the applicable tax provision. Please consult your Tax consultant before making any decision.
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