Many people assume that financial advice and financial planning are interchangeable terms – two ways of describing the same thing. However, this could not be further from the truth! The key difference between a financial planner and a financial adviser lies in their approach and focus. Understanding this distinction can make all the difference in how your financial future unfolds.
A financial planner is focused on you. Your goals, your dreams, your concerns. They take the time to understand your whole life picture, looking beyond just your investments to deliver a comprehensive, holistic financial strategy. Their work isn’t just about choosing the right products; it’s about developing a long-term plan that supports your vision for your future.
In contrast, a financial adviser typically zeroes in on one aspect: your money, your investments. They’re often product-driven, recommending a financial product that meets an immediate need. For example, if you’ve just had a baby and are considering life insurance, a financial adviser will help you find and purchase the right policy. It’s a transactional service. But a financial planner would step back and consider a wider range of options – not just life insurance, but also wills, tax-efficient trusts, school fees, income protection, and a host of other considerations that align with your broader life goals.
It’s easy to think that you need a financial adviser, but more often than not, what you’re really looking for is a financial planner – someone who takes the time to understand you and who offers expert guidance across all areas of your financial life, not just one part.
Even the UK Financial Conduct Authority (FCA) recognises this distinction. In their guidance, they make it clear that financial planning is different from financial advice. According to the FCA, not all advice is regulated. Generic advice, such as financial planning, is not the same as the specific investment advice that falls under FCA regulation. This clarity is vital because many in the financial services industry have blurred the lines, leading us to believe we’ve been speaking to professionals akin to accountants or solicitors, when, in fact, we’ve been dealing with product distributors.
The Chartered Institute for Securities & Investment (CISI) highlights this issue well. They state that in the UK, any financial adviser can call themselves a financial planner, even if they don’t provide any planning services. Unfortunately, many professional bodies, like the Chartered Insurance Institute (CII) and Personal Finance Society (PFS), have misled the public – and even those within the profession – about this distinction for years.
I was personally caught out by this. In 2017, I earned Chartered Financial Planner title and APFS designation with the CII and PFS, believing it would reinforce my professional credentials as a financial planner. Yet, when I stopped giving specific financial advice and ceased to be FCA-registered, I was told I could no longer use the title. It felt like a deception. Over the past five years, this misrepresentation has negatively impacted my business, with some clients viewing me as less professional because I no longer held a title tied to product sales.
This isn’t just about me – it’s about the broader industry and the next generation of financial professionals. Many graduates, hoping to enter what they believe is a professional career in financial planning, are being steered into product sales. The CII continues to uphold a system where financial planners are treated as financial advisers – insisting on sales competence to retain professional standing. Other bodies, like the London Institute of Banking & Finance (LIBF), at least call the title “Chartered Financial Adviser,” and designation Adv DipFA, being more honest about the role. Maybe the CII should follow suit and rename “Chartered Financial Planner” to “Chartered Financial Adviser” to avoid misleading everyone.
The CII states, “The qualification of choice for the planning profession – the RQF level 4 Diploma in Regulated Financial Planning meets the FCA’s qualification requirements for retail investment advisers.” However, this qualification creates confusion, equating planning professionals with retail advisers. These are not the same. The reality is, many financial planners who no longer sell products have simply “left the industry” – the product sales industry, that is. They haven’t left the financial planning profession, as defined by the FCA.
If you, too, feel frustrated or deceived, thinking you were part of a profession only to find out you were in an industry, know that you’re not alone. There’s an important shift happening, and it’s time to reclaim financial planning as a profession – one that’s focused on people, not products.
At the Academy of Life Planning, we believe in empowering individuals to create a sustainable, meaningful financial future, and we are committed to transparency. Our approach is holistic and people-centered, offering a true profession rather than a product-driven industry.
Isn’t it time you sought guidance from a real professional, not just an adviser?
Questions & Answers
Q: What’s the difference between a financial adviser and a financial planner?
A: Great question! The key difference lies in their focus. A financial adviser is typically product-driven, helping you with specific financial decisions, like choosing the right investment or insurance policy. A financial planner, on the other hand, looks at your entire life and financial situation. They work with you to create a holistic, long-term strategy tailored to your goals and aspirations. It’s a broader, more personalised approach that takes everything into account—not just your money, but how it fits into your overall life plan.
Q: I’m looking to protect my family’s future. Should I see a financial adviser or a financial planner?
A: If you’re seeking comprehensive support that covers not just one aspect, but the whole picture, a financial planner is the way to go. While a financial adviser can certainly help you with a specific product like life insurance, a financial planner will go deeper. They’ll consider your overall goals, such as providing for your children’s education, protecting your income, and even estate planning. It’s about creating a strategy that works for you and your family over the long term.
Q: Why do many people believe financial advice and financial planning are the same?
A: It’s easy to see why there’s confusion—many in the financial services industry have blurred the lines between the two. Unfortunately, some advisers market themselves as financial planners, even when their focus is mainly on selling products. This leads people to think they’re getting comprehensive planning, when in reality, they’re receiving advice on a specific financial decision. At the Academy of Life Planning, we focus on providing true, holistic financial planning that puts you at the centre of every decision.
Q: Does the Financial Conduct Authority (FCA) regulate financial planning?
A: The FCA regulates specific financial advice, particularly when it relates to recommending products like investments or pensions. However, financial planning is broader. According to the FCA, financial planning isn’t the same as specific advice and therefore isn’t regulated in the same way. What this means is that not all advice needs to be tied to a product—financial planning can simply be about creating a strategy for your life, independent of any products.
Q: Can anyone call themselves a financial planner in the UK?
A: Unfortunately, yes. In the UK, any financial adviser can use the title “financial planner,” even if they don’t offer comprehensive planning services. This is a real issue, as it leads to confusion for people looking for a true professional to help with their long-term financial wellbeing. At the Academy of Life Planning, we believe in the power of real financial planning—focused on people, not products—and we’re committed to providing transparency and clarity to those we help.
Q: I’ve been advised to pursue a qualification with the Chartered Insurance Institute (CII) to become a financial planner. Is this the right route?
A: It’s worth considering your long-term career goals. The CII qualification can lead to becoming a financial adviser, but that often means focusing on selling financial products to clients. If you’re looking for a career as a financial planner, where you can offer a holistic, client-centred approach, it’s important to understand that some qualifications emphasise product sales more than planning. It’s key to choose a path that aligns with the kind of professional you want to become.
Q: I’ve always thought financial planning was a profession like accounting or law. Is that not the case?
A: Financial planning should be viewed as a profession, like accounting or law. However, many financial advisers have blurred the lines, presenting themselves as planners when they are, in fact, more focused on selling products. This misrepresentation can make it hard to find true financial planning services. But rest assured, there are professionals dedicated to holistic, client-focused planning. It’s just about knowing where to look, and at the Academy of Life Planning, we aim to bring that clarity and professionalism to you.
Q: What should I look for in a financial planner to ensure they’re really offering planning services?
A: First and foremost, look for someone who takes the time to understand your whole financial picture—your goals, your values, and your long-term aspirations. They should offer a comprehensive plan that goes beyond product recommendations, looking at your life as a whole. Ask them about their approach: Do they focus on holistic planning, or are they tied to selling specific products? Transparency and a focus on your overall wellbeing are key indicators that you’ve found a true financial planner.
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