Here’s a crucial thing to remember: a financial planner is a type of financial advisor, but a financial advisor is not necessarily a financial planner, at least not when using the phrase the way most in the industry do. It’s a gray area, to be sure, but here are some guidelines that will help you decipher the phrases in most cases.

A financial advisor is generally viewed as anyone who advises someone on money issues. It’s a fairly broad term that could include any number of people who might help you, including a broker or investment advisor, an insurance agent or an accountant. Duties may include:

  • Offering advice on how much money to save
  • Making investment suggestions
  • Offering tax advice
  • Buying and selling investments on behalf of a client, (but they must have special qualifications to do so. See below.)

A financial planner, meanwhile, usually refers to someone who takes a more comprehensive approach.

The work is generally more in-depth and may involve fully managing investment portfolios and assisting a person in achieving financial goals from college graduation all the way up to and through retirement.

There is nothing stopping someone from calling themselves a financial planner if they provide planning services as they’re broadly defined. But within the industry, there is a tacit understanding that the financial planning title should fall only to those who carry the Certified Financial Planner (CFP) designation.

Getting a CFP designation isn’t easy. Someone seeking one must have a college degree, have three years of work experience in planning, complete rigorous coursework (or hold select degrees or licenses for accounting or law, for example) and pass exams administered by the Certified Financial Planner Board of Standards, a non-profit organization that manages the certifications.1

The CFP Board has a code of conduct, rules about ethics, and disciplinary procedures.2 You can verify someone is a CFP right on the board’s website.