How is an accountant different from a financial adviser? (2024)

Both accountants and financial advisers play an important role in helping individuals manage their finances. But knowing whether you need a financial adviser or an accountant can be tricky to work out. An accountant provides tax advice, business finance advice and asset protection. On the other hand, a financial adviser can help you achieve specific financial life goals, like buying a home, funding your children’s education, launching a business or retiring early. Understanding the difference between the two financial experts can help you choose which one you need.

Why everyone needs a financial professional

We understand that navigating the financial services industry can be confusing. This is why we recommend finding a finance partner that has tailored services designed to help you reach your financial goals. Pinpointing your specific financial needs determines which kind of financial consultant can best serve you. Some of the most common reasons clients seek out financial advice can include:

Budgeting

Getting assistance with budgeting and cash flow management is the cornerstone of any financial strategy, enabling you to maximise your savings to invest towards your future goals.

Investing

A financial adviser can help direct how, where and when to invest your money to reach your goals. They can model different investment approaches to help you make smart decisions, for example, investing in property versus shares.

Retirement planning

Financial advisors and accountants can help you maximise your superannuation or manage a Self-Managed Super Fund (SMSF) to achieve your desired lifestyle in retirement.

Starting a business

If you’re starting a business, you’ll benefit from financial experts advising on structures, establishing forecasts and developing a strategy for managing your professional and personal finances.

Tax minimisation

Individuals and businesses can save thousands in tax by consulting with qualified tax accountants who offer practical advice, tax preparation services and tax minimisation strategies.

Asset protection

With a keen understanding of legal frameworks, accountants can implement asset protection strategies, such as trusts, shielding your wealth from potential risks and liabilities.

Once you have narrowed your focus, you should match your needs against the primary skill set to decide which financial professional is right for you.

What is the difference between an accountant and a financial advisor?

Accountants and financial advisors are both valuable for financial growth. Whether you are an individual wanting to make the most of your hard-earned money, or a business seeking sustainable growth, you will require the help of one — or both — of these financial professionals. Some of the services offered by accountants and financial advisors offer overlap, but that does not necessarily mean you can swap out one for the other. Exploring what each of these financial experts does and who they serve can help you decide which is right for your needs.

The role of accountants

Accountants play a pivotal role to both businesses and individuals. They can help minimise tax liability now and in the future through strategic tax planning. They provide valuable business advisory services, offering insights into business structure, financial performance and growth strategies. Accountants navigate the intricacies of trust formation, ensuring efficient wealth distribution and asset protection. The are also proficient in managing Self-Managed Superannuation Funds (SMSFs), tailoring investment strategies to align with retirement goals while adhering to regulatory requirements.

The role of financial advisors

Historically, financial advisers helped with retirement planning. Today, good financial advisors help you make smart decisions with your money so that you can get all you want out of life. This could include buying a home, funding your children’s education, or retiring by 40. A thorough financial planner considers your age, relationship with money, assets, liabilities, savings capacity, family situation, career plans and lifestyle goals. They then use this information to craft unique financial strategies that match your short, medium and long-term financial goals.

Can accountants give financial advice?

Prior to 30 June 2016, accountants could offer financial advice. However, since the financial advice reforms were approved, the rules have changed. Now, accountants can only give you financial advice on investments if they hold an Australian Financial Services (AFS) licence or if they are an authorised representative of an AFS licence holder.

Accountants without an AFS license can still assist with basic self-managed super fund administrative tasks like paperwork for fund establishment and rollovers, as well as provide information about investments and investing strategies. Disclaimers and waivers do not override this licensing requirement.

Do I need a financial advisor and an accountant?

Deciding on which kind of financial expert you need depends on your situation. If you are looking for specific tax advice, like filing a tax return, an accountant is an obvious choice. However, if figuring out how to position your assets for meeting future goals is your immediate concern, then a financial planner is the right fit.

In some instances, you may benefit from working with both an accountant and a financial adviser. Business owners are among those who should consider consulting with both. Working with an accountant and a financial planner is a best-of-both-worlds scenario for business owners who want to grow their business, reduce tax and set aside a tidy nest egg for their retirement. Coordinating the advice that you receive from each of these financial experts can maximise your wealth.

Ideally, you want to choose a financial services firm that offers both accounting and financial planning services — like Financial Spectrum. The unique synergy between Financial Spectrum’s experienced accountants and financial advisors enables us to offer holistic financial solutions that boost your financial standing and streamline your finances. This high level of collaboration from financial specialists working alongside each other leaves no room for errors and missed chances.

Financial advisor vs accountant: which is better?

There is no need to choose between a financial adviser and an accountant when you work with Financial Spectrum. We have a team of in-house accountants who work in tandem with our financial advisers. Having full visibility of your financial affairs enables our financial experts to provide relevant advice that delivers better client outcomes. Integrating and streamlining all aspects of your finances also provides huge efficiencies in terms of cost, paperwork and time. Business owners who need to integrate their personal and business finances find this especially advantageous.

Book your free strategy session with one of our team members to get started on reaching your financial goals for today and the future.

How is an accountant different from a financial adviser? (1)

Brenton Tong

Consistently ranked one of Sydney’s top financial planners (Adviser Ratings), Brenton helps his clients life a great life by making the most of their money. Read his full bio here.

How is an accountant different from a financial adviser? (2024)

FAQs

How is an accountant different from a financial adviser? ›

Accountants typically offer services related to tax preparation and may also be involved with financial statements or tracking and organizing transactions. Financial advisors help with retirement planning, investment management, estate planning, tax strategy and more.

What is the difference between a financial advisor and an accountant? ›

Financial advisors mainly serve individual clients looking for advice on how to meet financial goals. Accountants typically focus on transactions during a specific period and help individuals with their annual tax filings, while financial advisors often take a long-term view and help clients plan for the future.

What is the difference between accountant and financial accountant? ›

Financial accounting provides external stakeholders with an accurate picture of a company's financial health, while other accounting focuses on internal processes and decision-making. Both types of accounting require accuracy and attention to detail, but with different goals in mind.

What is the difference between a financial analyst and an accountant? ›

A financial analyst looks to past and current trends to help achieve a future reality, while an accountant may review a company's financial data on a day-to-day basis. Many financial analysts use reports generated by accountants to make recommendations about how best to use company resources.

What makes you different as a financial advisor? ›

Putting a Client's Interests First

Successful financial advisors are ones that put the interests of their clients first and their own interests second. The advisor must believe that the financial interests of both parties should be aligned, or else a harmful relationship may occur.

What advice can an accountant give? ›

Accountants can support you and your business and guide you to make the right financial decisions. An accountant can give you advice about: starting, buying, growing or ending a business. tax, including goods and services tax (GST) and business activity statements (BAS)

What is the difference between an accountant and a financial advisor NZ? ›

While accountants focus on accurate record-keeping, financial reporting, and taxation, financial advisors take a holistic approach to wealth management, encompassing investment planning, retirement strategies, risk management, and debt management.

What is higher than an accountant? ›

A controller, or comptroller, oversees the accounting operations of a firm, including managing staff. Because controllers' duties and responsibilities expand beyond that of an accountant, they typically command larger salaries.

Which is better accountant or finance? ›

Finance professionals deal with aspects such as return on investment (ROI) and risk management, and accountants focus on items such as balance sheets and income statements. The field of finance offers more career choices but also less predictability. In some cases, careers in finance might offer higher pay.

Which is harder, finance or accounting? ›

While both finance and accounting can be difficult majors, accounting is considered more difficult because it requires more discipline and a lot of math. Accounting is more complex because it relies on precise sets of arithmetic principles.

What is the difference between finance and accounting? ›

What is the Difference Between Finance and Accounting? Accounting is a narrower field that focuses on professional processes to manage numbers and accounts, while finance uses the same information to analyze potential growth patterns in order to strategize company finances.

Who gets paid more accountants or finance? ›

Accounting and Finance Degree Salary

The National Association of Colleges and Employers conducted an analysis and determined that the average annual salary for accounting degrees in the United States is generally around $57,511, and the average annual salary for finance degrees is $58,464.

What do accountants do? ›

Accountants and auditors prepare and examine financial records, identify potential areas of opportunity and risk, and provide solutions for businesses and individuals. They ensure that financial records are accurate, that financial and data risks are evaluated, and that taxes are paid properly.

What is the core value of a financial advisor? ›

Integrity: Provide professional services with integrity. Objectivity: Provide professional services objectively. Competence: Maintain the knowledge and skill necessary to provide professional services competently. Fairness: Be fair and reasonable in all professional relationships.

Why would someone want a financial advisor? ›

For example, financial advisors can help you plan for retirement, budget, plan your estate and more. They also help you set your personal financial goals to reach milestones.

What should I say in a financial advisor interview? ›

Sample Answer: I believe my experience as a financial advisor with my previous employer makes me a strong candidate for this position. I have a strong network of clients and a wealth of knowledge about financial planning that I would love to put to use here.

Can an accountant be a financial adviser? ›

Your accountant is not allowed to receive commission or provide advice on specific products, so you can be assured that their advice is always neutral. They can also offer you a broader range and greater choice in investments, so you can make informed decisions, choosing exactly where you want to invest your money.

Do financial advisors make more money than accountants? ›

Salary and Career Path - CPA vs CFP

According to the Bureau of Labor Statistics (BLS), an accountant with a bachelor's degree can earn more than $78,000 per year on average, but a CPA can earn around $119,000. Certified Financial Planner (CFP) salaries in the United States range from $39,300 to $187,200.

Do accountants and financial advisors work together? ›

They can work together to ensure that all aspects of your financial plan are aligned and that your investments and tax strategies work together. This can lead to better outcomes and more efficient use of your resources. Cost Savings: Working with a combined CPA and financial adviser can save costs.

Is it better to go with a financial advisor? ›

Not everyone needs a financial advisor, especially since it's an additional cost. But having the extra help and advice can be paramount in reaching financial goals, especially if you're feeling stuck or unsure of how to get there.

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