Financial adviser vs financial planner: what's the difference?
What's the difference between a financial adviser and a financial planner in the UK? We reveal how each can help you make smart decisions with your money.
A financial adviser focuses on recommending specific financial products, while a financial planner takes a more holistic, long-term approach to creating an overall financial strategy.
Learn more about the differences between the two below and find out which professional would suit your needs best.
A financial adviser offers advice on all areas of finance, whereas a financial planner creates plans to help clients achieve their goals.
Financial planners and advisers have different fees, which may be fixed or commission-based.
Both financial planners and advisers must be qualified and adhere to strict regulations.
Knowing which financial professional is right for you ensures your financial future is in good hands.
What is a financial adviser?
In the UK, financial advisers offer advice on investments, savings, estate management, and other areas of personal finance.
A financial adviser can help you strategise how to approach a particular situation or problem and provide guidance and resources to help you achieve specific money goals.
Every year, the number of people in the UK who hire financial professionals grows.
But knowing which type of professional to hire is key to reaching your goals and securing your financial future.
Do you need a financial planner or a financial adviser, and why do they differ? Let’s find out.
What qualifications and regulations do financial advisers have?
Financial advisers are fully regulated by the Financial Conduct Authority (FCA) and are required to hold a minimum Level 4 diploma in regulated financial planning (CII) or DipFA (LIBF).
The qualification takes around 12 to 18 months to study part-time and includes multiple exams and modules on financial services, regulation and financial planning.
How much does a financial adviser cost?
Fees within the financial services industry vary from person to person and may depend on whether a financial adviser works independently or for a firm.
With hourly rates, you can expect to pay anywhere between £100 and £350 per hour, according to MoneyHelper, depending on the adviser and what services are required.
However, there are other fee structures to consider:
Fixed fee: Some financial advisers require a set rate for their services, which is determined upfront.
Percentage of assets: You pay the adviser a percentage of your managed assets each month, whether it's managing your investments or pension.
Commission: This is an asset under management fee with a pre-agreed commission percentage.
What is a financial planner?
Financial planners typically specialise in compiling personalised long-term financial plans for individual clients.
But while the title 'financial planner' comes with strict regulations in other countries, the UK has a slightly different approach.
Financial planner is a more general term than financial adviser. It doesn’t require any specific qualifications, isn’t a protected term and isn’t directly regulated by the FCA.
Many financial planners do have financial qualifications, but it doesn’t necessarily have to be a Level 4 diploma in regulated financial planning (CII) or DipFA (LIBF).
How are financial planners regulated?
However, although financial planners aren’t regulated when providing general financial coaching, they are regulated when they provide advice on regulated financial products like pensions and investments.
Financial planners typically focus on providing long-term financial plans that serve as roadmaps for those seeking more control over their general financial health.
Perhaps confusingly, becoming a ‘chartered financial planner’ is the top qualification for financial advisers, so watch out for someone with this qualification.
They may have more experience and charge a little more for their advice.
How much does a financial planner cost?
As financial planners tend to focus more on long-term client working relationships than financial advisers, their costs are typically percentage-based or set by commission.
As an example, Hargreaves Lansdown charge a minimum of £1,495 for financial planning, with percentage based fees as per the below:
| Assets advised on | Charge |
|---|---|
| Up to £200k | 2% |
| Next £200k - £1m | 1.5% |
| Balance over £1m | 0% |
What is the difference between a financial adviser and a financial planner?
A financial adviser typically provides advice on specific financial products, investments, pensions, or insurance based on your immediate needs or specific financial queries.
Their role is often transactional and focuses on particular financial goals like saving for retirement.
In contrast, a financial planner takes a more holistic view, helping you develop a comprehensive financial strategy to meet long-term objectives.
They consider your entire financial situation, including retirement, estate planning, taxes, savings, and investment goals, aiming for long-term financial health and growth.
Below is a quick summary of the main differences between financial advisers and financial planners:
| Financial adviser | Financial planner | |
|---|---|---|
| Focus | Specific products (pensions, investments, mortgages) | Whole financial picture over the long term |
| Relationship | Often one-off or transactional | Usually ongoing, with regular reviews |
| Regulation | Always FCA-regulated when advising on regulated products | Regulated only when advice touches regulated products |
| Typical fee | Hourly, fixed, or percentage of assets | Percentage-based or fixed project fee |
What do financial advisers and planners have in common?
Both financial advisers and financial planners share many overlapping areas of expertise and hold similar qualifications despite their differences in occupation.
Financial advisers and planners are strictly regulated to ensure that there is no room for unscrupulous activity.
If you have any issues with a financial professional, you can get help by filing a complaint with the (FCA) or complaining to the Financial Services Ombudsman.
While some online investment platforms may offer cheap financial advice for £300 to £600, according to Which?, they can often only recommend their own products and services.
What is a chartered financial planner?
In the UK, the highest formal badge of qualification for a financial adviser is achieving chartered financial planner status, which is equivalent to degree level.
To qualify, advisers have to hold the CII Level 6 advanced diploma in financial planning or PFS Fellowship, be a member of the Personal Finance Society and have at least five years’ experience.
Financial adviser vs financial planner: which best suits your needs?
A financial adviser tends to suit you if you have a specific need: remortgaging, reviewing a pension, or building an investment portfolio.
A financial planner tends to suit you if you're thinking further ahead: retiring in the next decade, passing on wealth to your family, or bringing together pensions, savings, and tax planning into one strategy.
Many people use both. It's common to match with a financial adviser for a specific product decision, then work with a financial planner (or the same person, wearing both hats) for the ongoing relationship.
The titles aren't legally protected in the UK, so some professionals do both jobs under one name, ask what they actually offer rather than relying on the title alone.
According to the FCA, the average customer using a financial adviser to invest has over £150,000 in their portfolio.
Seek expert financial advice
Hiring a financial professional is a smart way to manage your financial health and grow your money long-term.
While financial advice may cost money, the right advice will save you cash in the long run and help you avoid making costly mistakes with your nest egg.
If you’d like to learn more about finances or need of expert advice, let Unbiased match you with the right financial professional for your needs.
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