The job titles of financial adviser and financial planner are closely related and almost interchangeable. If you are one or the other, your clients may refer to you by either title. The difference between a planner and adviser usually boils down to the range of services you provide to your clients and how you are compensated for your work.
Work as a financial adviser typically requires a related securities or insurance license. As a financial adviser you would help clients select and put their money to work with investments, insurance products or annuities. Depending on where you work, you may need a stock broker's license or a life insurance license. Financial advisers work at stock brokerage companies, life insurance agencies, banks and credit unions or on their own as self-employed advisers.
Advising for Commissions
Compensation for financial advisers usually includes some form of commission based compensation plan. Adviser work is a process of working with clients to help them reach their financial goals by purchasing appropriate investment or insurance products. As an adviser you may be selling just one line or type of financial product or working for a firm that offers products to cover the complete financial needs of customers. A big part of financial services work is to have the selling skills to get clients to buy the products your company offers after working with clients to find out their current financial situations and making recommendations to reach their financial goals.
Big Picture Planning
The work of a financial planner expands on what is usually covered by a financial adviser to the development of comprehensive plans concerning a client's complete financial picture. Besides investment products, a planner puts together recommendations concerning asset protection, tax, retirement and estate planning. A financial planner has completed additional courses of study in these areas and passed examinations to prove her level of knowledge. A financial planner typically works on a fee based compensation system, getting paid for the completed plan, but may also earn commissions for selling products.
Career Path Progression
Most financial firms like to see a college degree when hiring new financial advisers. The hiring firm will then sponsor a new adviser to study and sit for the broker and insurance licensing tests. The move up to a financial planner occurs when a licensed adviser takes the steps to get the extra education and take the certification exams to provide the full range of financial planning services. Both types of work -- selling products as a financial adviser or putting together comprehensive financial plans as a planner -- can be done as an employee of a larger financial company or as self-employed work.
2016 Salary Information for Personal Financial Advisors
Personal financial advisors earned a median annual salary of $90,530 in 2016, according to the U.S. Bureau of Labor Statistics. On the low end, personal financial advisors earned a 25th percentile salary of $57,460, meaning 75 percent earned more than this amount. The 75th percentile salary is $160,490, meaning 25 percent earn more. In 2016, 271,900 people were employed in the U.S. as personal financial advisors.