WHAT’S THE DIFFERENCE BETWEEN AN ACCOUNTANT AND A FINANCIAL PLANNER?
With two industries that both immerse themselves heavily in monetary matters, it’s perhaps easy to see how there could be a certain level of confusion over whether the most suitable person to give you financial advice is an accountant or a financial planner. In theory, each profession has a degree of overlap with the other, but in practice, both specialisms are diverse and you would be poorly advised to assume that one can take on the role of the other in totality, let alone do it as well. While it can be appealing to rely upon one person to do both jobs for you, you would be better off to really consider the help you are looking for and tap deeply into the pool of knowledge that will benefit you the most.
SO DO YOU NEED AN ACCOUNTANT, OR A FINANCIAL PLANNER?…
There are undoubtedly overlaps, but to simplify things, an accountant could be considered to be ‘all about’ taxes. Accountants ensure that you are managing your taxes legally and effectively, which can include recording, submitting, and strategising on ways in which to reduce them.
If you are looking for help preparing your tax return, managing your business income and expenses, or ensuring your taxes are all being filed correctly, you need an accountant.
While an accountant is ‘all about taxes’, a financial planner is ‘all about investments’. A financial planner looks at different circumstances to an accountant; being less involved in the immediate tax implications and more concerned with the big picture and the longer-term outlook on your finances and – in the case of lifestyle financial planning – your future, hopes and dreams. A lifestyle financial planner will look to build your assets in the most effective way possible to realise your life goals. Naturally, there will be an overlap with taxation rules and regulations and it’s therefore essential that they are followed, but a financial planner will look to how your business integrates with your life on more than just its current financial level.
If you are looking for help with budgeting, investing, estate planning, business insurance and protecting your business from a financial standpoint, you need a financial planner.
IF YOU HAVE A FINANCIAL PLANNER DO YOU NEED AN ACCOUNTANT?
Not everyone needs an accountant, but there are some situations where they will almost certainly be able to keep you on track and help you to save money. This is especially true if you are particularly wealthy or if you are the owner of your own business. As an ambitious business owner, a financial planner will be able to help you look at the bigger picture and provide assistance with budgeting, investing or recovering from debt.
The important thing to remember is that both professions should be working with your best interests in mind. There is no need to have standalone relationships with your accountant and financial planner and it is never a bad idea to have them working together or in communication.
To speak to us further about your investments, please get in touch.
This article does not constitute financial advice and should not be construed as such.