Which financial professionals can help with different planning needs?
There can be a great deal of confusion among consumers as to who to turn to when it comes to providing financial advice, and how he/she may be able to help with saving for the future, investments, asset protection, and learning how to budget strategically. Financial professionals come in many different guises — from a registered investment adviser to a registered representative, and even an insurance agent.
Why is this important to know? Because if you're considering getting assistance with things such as financial management, protecting your income, saving for college, retirement and estate planning, and even day-to-day budgeting, you'll need to know who might be the best fit based on your needs.
The insurance agent
Insurance agents are licensed professionals who may sell many different types of insurance policies. This can include everything from life to disability insurance, to retirement income products such as annuities. While an insurance agent isn't a financial planner per se, he/she can be the frontrunner when it comes to all things related to personal asset protection, which can be a critical component of a solid financial plan. A good insurance agent or life insurance company representative can review your coverage needs and help fill in any gaps with the right type of insurance protection.
The registered investment advisor
A registered investment advisor is an individual or a firm that receives compensation by giving advice about securities to clients. This includes providing advice on investing in stocks, bonds, mutual funds, or exchange traded funds, as well as actively managing your investment portfolio. As a registered investment advisor, he/she has a fiduciary duty to manage your money based on your best interest. Note: Not all investment advisors are certified financial planners.
The financial planner
In general financial planners set out to assess every aspect of your financial life and help you learn to budget and build a strategy to meet your financial objectives and goals. A financial planner could help you with learning to budget and save, investments, insurance, retirement and estate planning. Many financial planners are also investment advisors and licensed insurance agents.
According to the U.S. Securities and Exchange Commission, before you hire any financial professional, it's important to know exactly what services you need, what services the professional can deliver, any limitations on what they can recommend, what services you're paying for, how much those services cost, and how they are compensated.1
From learning how to budget to asset allocation and financial advising, you'll find much more about money management by exploring our Learning Center.