The Difference Between a Financial Advisor and an Accountant

If you don't work in the financial services industry, you probably don't see much of a difference between your accountant and your financial advisor. Both individuals have extensive financial training and work with people's money on a daily basis. However, assuming that the two are one in the same can lead you down an unstable path financially. You may be able to ask the same questions of either professional, but the answers you get are likely going to be shaped by their specific training and opinions.

As you consider working with an accountant or financial advisor, it is important to learn the exact differences so you understand the benefits and drawbacks of working with either. In the following paragraphs, you'll learn all the basics of these two positions and the benefits that come from partnering with either.

What is a Financial Advisor?

A financial advisor is an educated, experienced financial professional that focuses on investments. Your financial advisor is responsible for focusing on the big picture that is your overall finances. When you work with a financial advisor, you are partnering with a professional that can help you established goal-oriented financial investing plans to build wealth over your lifetime and protect it against volatility and fluctuations. When choosing a financial advisor to work with it is good to know if that advisor is a CFP®. CFP® stands for CERTIFIED FINANCIAL PLANNER™ and is a designation of professional certification that is awarded to financial planners by the Certified Financial Planner Board of Standards. A financial advisor focuses on some of the following tasks:

· Budgeting

· Investing (both short and long term)

· Asset allocation across various portfolios

· Estate planning to handle distribution of your wealth later in life

· Insurance planning (disability, life, etc.)

· Wealth accumulation and protection.

What is an Accountant?

An accountant is, first and foremost, a tax professional. When you sit down to work with your accountant, you are working on strategizing for your year-end taxes, sheltering funds, budgeting for the next year, and preparing your tax return for the state and federal governments. Your accountant also has years of education and experience that provides them with insight into big-picture opportunities and strategies to help you stay ahead financially. Some of the tasks your accountant will focus on include:

· Tax preparation

· Financial statements

· Depreciation

· Breakdown of expenses

· Appropriate tax shelter recommendations

· Tax laws and their impact on your finances

· Business structure recommendations

· Business growth and succession strategies (as it relates to taxes)

· Representation in the event of an audit

What's the Difference?

In the simple terms, your accountant is a great partner when you need to analyze your current income and expenses, pay your state and federal taxes, and plan for future income and expenses as it relates to your tax filings. An accountant keeps your yearly financials in order, and works with your money as it relates to income and expenses.

A financial advisor, on the other hand, is going to be able to help you build wealth over time and advise you on the benefits and drawbacks (as it relates to your taxes) of any and all investment plans you pursue. An accountant can only help you increase your income by finding ways to reduce your tax liabilities. Financial planners help you create real income by putting together investment strategies that allow you to build wealth over time, earn interest on your investments, and advise you on the insurance plans that will protect that wealth. When you decide to work with a CERTIFIED FINANCIAL PLANNER™, you've made a smart investment in your long-term financial health. As you consider working with a financial planner, look for an individual with the CFP® certification.

Knowing who and where to place your confidence when it relates to your money is a big decision. The more you know about the professionals that you can leverage to build your wealth, the better your chance for consistent growth and progress. Contact Indian River Financial Group today to get started in the right direction towards financial freedom!