You're doing your research and trying to determine which type of financial professional is right for you and your unique journey. It's completely normal to feel a bit overwhelmed by the sheer volume of options out there. We want to validate that confusion and help you cut through the noise so you can find a partner who truly aligns with your values.
Advisor, planner, or coach?
If you have been Googling terms, you've probably noticed that most financial professional titles seem to describe what they do. You might see investment advisor, financial advisor, financial planner, and wealth manager, just to name a few.
If you go far enough down the rabbit hole, you'll find that there are over 200 designations in addition to the various titles. Finding any meaningful information is as difficult as searching WebMD to look up your symptoms. You either have three months to live or you just need two Advil and a good night's rest. You often leave with more questions than answers.
With such a dizzying array of options, how can you find the right professional for you? Here is what you need to know to find the one thing that really matters.
Why the title doesn't tell the whole story
The industry spends a lot of time trying to explain the difference between these titles, but here is the real answer. It doesn't matter.
The longer answer is that there are no established standards in the industry for when and how financial professionals can use specific titles. A professional can even call themselves an advisor on Monday, a planner on Tuesday, and a wealth manager on Wednesday.
Professionals with different levels of education, certifications, services, and fee models can all use the same language. Imagine if doctors and nurses didn't have to meet rigorous educational and experience requirements to use their titles. Would you feel as comfortable on your next visit?
For example:
- An investment advisor might say that they invest money for their clients and provide financial planning as part of their services.
- A financial planner might say that they create financial roadmaps for clients and provide investment services as part of the journey.
The difference is clear as mud. Not to mention that the definition of what financial planning is varies from professional to professional.
Out of 212 titles, only one standard matters
While we could define the titles as we see them, the title a professional uses doesn't matter. Here is what does: education, certifications or designations, experience, and ethical standards.
There are over 200 designations for financial professionals in the industry but no standard for what an advisor or planner should do for their clients. The good news is that one organization created a standard that elevated the level of education, experience, and ethical requirements: The CFP Board.
The CFP Board created the CFP® professional certification to create a new standard of professional excellence. CFP® professionals are held to rigorous educational requirements, must meet industry experience requirements, and must hold themselves to the fiduciary standard. This means they're committed to doing what is right and best for their clients.
The right questions to ask
While the CFP® professional designation is a great place to start, even those with it can still use different financial professional titles, provide vastly different levels of service, and charge different fee structures regardless of what they actually do. You need to find a planner that will provide objective and personalized financial advice that integrates into every facet of your life. We call this "financial planning as it should be."
While the broader financial industry has varying standards, the CFP Board requires all CFP® professionals to act as fiduciaries. Similarly, as an SEC-registered investment adviser, Facet is legally bound to a fiduciary standard, meaning we're required to act in your best interest.
Don't settle for anything less than a CFP® professional, but don't stop there. Regardless of the title they use, ask these questions to get the answers you deserve:
- What designations (or certifications) do you have? Are you a CFP® professional?
- What services do you provide and how do you charge (or how do I pay you)?
- Will you help with just my investments or everything in my life that money touches?
This is an important decision and we recommend that you read our complete guide, 10 Questions To Ask Before Working With A Financial Planner, to help you find someone you can trust.
Asking if someone is an investment advisor, financial advisor, or financial planner is the wrong question. The right question is simply "Are you a CFP® professional?" This will help you find someone that is committed to elevating the standard for the industry and for what you, and others, deserve.
The Facet difference
At Facet, we believe you deserve honest advice and personalized guidance for every way money touches your life. We don't just focus on investment returns; we focus on your return on life. This rigorous standard of service is why all Facet planners are CFP® professionals, focused on helping you achieve the life you want to live. We offer this through a transparent membership model that puts your interests first, designed to keep your financial roadmap clear, actionable, and aligned with your values.
