3 Differences Between
Your Financial Advisor And An Investment Advisor
It’s no secret: there are constant changes in the financial
There are more and more great opportunities that open up for
Thanks to technology and globalization, many SMEs have
access to the same investment advisors and funds as large companies.
Because of this, many people confuse investment advisers with
financial planning experts.
Here we try to explain
the 3 biggest differences:
1. Advisors only give
It sounds obvious, right? But you would be surprised to see
how many people believe that investment advisers also know financial planning.
Some advisors do it without going into depth, although they
do not understand how to define budgets in my company.
But planning requires much more knowledge in other areas,
more experience and confidence of the general direction.
advisors make 10 percent or less of what financial planners do
Good planners focus on seven different thematic areas:
Preparation of financial statements and analysis
of cash flow and budget
Planning and management of risks and coverages
Employee benefits planning
Patrimonial plan of company and partners
By asking some investment advisors questions to determine
their risk tolerance, they place you in a portfolio that is identical or almost
identical to other cases they have already contributed to other clients.
The planners (or financial advisor) with a longer-term
obligation will do something similar for the investments, they also wholly
customize their business plan according to the objectives of the partners and
even thinking about how to reduce the financial risk.
Whatever your ultimate image, your CFO will give you
specific and personalized advice, which will help you reach your goals in the
most objective way possible.
One way to close this explanation about the gap between an
investment advisor and a financial planner we propose a simple exercise:
If we offered the analysis of your finances and had to
decide if you need advice on a pure investment or a broader plan to achieve
your goals smoothly, which one would you choose?