When it comes to the management of your finances, you may have heard the terms "financial manager" and "financial planner."
Although both roles are professional and deal with money, there are still a lot of differences between them.
By reading this article, you are going to understand the differences between a financial planner and a financial manager. You will also be able to know which of these professionals suit your needs most. What are their differences?
Separate Responsibilities and Roles
A financial planner assists families and individuals in creating a financial plan.
They assist them in meeting all their financial goals, like college payment, saving money for retirement, or a new mortgage.
A financial planner may also provide tax advice, insurance, and estate planning services.
A financial manager on the other hand is responsible for managing the financial resources of an organization or a business.
This can include developing budgets, creating financial reports, and analyzing financial data for informed business decisions.
Financial managers may also sometimes be responsible for raising capital, managing investment, and overseeing the financial activities of an organization.
The Types of Clients That They Manage
Financial planners majorly work with families or individuals as their clients.
For instance, if you have a family, you may need to set up college funds for your children, plan a major purchase, or even care for a child with special needs.
Doing all of these on your own will be difficult because you have work and other personal issues to attend to.
A financial planner is the best fit to help you in this situation.
Financial managers, however, focus on businesses or organizations and assist them in managing and overseeing their finances.
Examples are managing investments, developing an annual budget, or raising capital for a project.
Their Education and Certification Requirements
The educational and certification requirements for a financial planner and a financial manager are different.
For financial planners to be able to practice their profession legally, they should hold a finance degree or a degree in any other related field.
They may also be required to pass specific examinations and meet the continuing education requirements needed to become certified in their field.
It is compulsory for financial managers to have a finance degree, but not just that. In addition, they must hold specifically required certification which is either the CPA or the CFA.
Differences in Their fees
A financial planner and a financial manager both charge different fees for the services that they offer.
Financial planners often charge based on a percentage of the assets they manage, a flat fee, or an hourly rate.
Financial managers, however, often charge a flat fee, a percentage of the profits of the organization or business, or sometimes, a combination of both.
Conclusion
Financial planners and financial managers both deal with money. But their roles are different.
If you're looking to hire anyone for individual or business purposes, it is important to properly research.
Also, endeavor to know the detailed qualifications and experience of the financial professional before hiring them.
