Tax planner, financial planner, and financial advisor — what’s the difference between the three? Sometimes a lot, sometimes not much. Each of the three serves in an advisory capacity with regard to at least some, and sometimes all, of your personal financial situation. Knowing how to they differ from one another will help you make the correct choice for create your own unique financial strategy plan, said by Thomas Gehrmann.

So understand which one is best for you and your investment situation with Financial Planner Thomas Gehrmann-

Financial Advisor

If a financial planner is primarily a generalist with regards to your financial situation, a financial advisor’s contribution is usually more specific. Most often, a financial advisor will specialize in investments. The financial advisor can operate either in a purely advisory role — making investment recommendations you can act on — or as a direct manager of your portfolio.

Financial advisors can also work in capacities apart from investments. For example, they may get involved in estate planning, retirement planning, mortgages, or insurance. Most typically, however, you’ll use the services of a financial advisor for a single specific purpose.

Financial advisors are typically compensated for their services either by earning commissions on the products they sell to you, or by charging a flat fee. In general, those who operate on a flat fee, should be preferred. This is because they are not being paid to sell you something, but rather to give you sound advice to enable them to retain you as a client.

Financial Planner

Financial planners are more general in application, and are likely to work under different labels and in different professions. They often have specific professional designations, such as CFP — certified financial planner — or, RFP — registered financial planner. But they can also be in related fields, such as CPAs and attorneys.

Beyond these very specific professions, the concept of financial planner can get a bit vague. Many people who work in an area of the financial industry often refer to themselves as financial planners. For example, insurance agents may consider themselves financial planners, as the work they do often encompasses investments like annuities, in addition to basic life insurance.

You should never consider someone to be a financial planner if they will be paid a commission or other type of fee to place you in specific products or investments. The financial planner should be a generalist who will recommend — but not necessarily benefit from — the widest possible number of options for you.

What a financial planner does is help you achieve long-term financial goals. They do this by analyzing your current financial profile, helping you to clarify and establish specific goals, and then creating a plan to enable you to reach these goals.

These objectives might also cause a financial planner to be closely involved with your income tax situation, as well as with your investment activities.

Tax Planner

A tax planner is generally a professional with specific expertise in the area of income taxation. This can include an accountant, a certified public accountant (CPA), or a tax attorney. In addition to recognized professional credentials, each is involved extensively in both income tax preparation and research.

Their involvement in your financial situation will center very specifically on the income tax aspects of your personal finances. However, since income taxes encompass such a wide range of financial matters, they will generally have extensive knowledge of most other areas of personal finance as well. This is why a tax planner can often be confused with either a financial planner or financial advisor.

More specifically, a tax planner is someone with detailed knowledge of your personal income tax situation. With this understanding, he or she can not only help you to minimize income taxes in the current year, but can also instruct you on how to reduce taxes in the future.

In fact, the most basic function of a tax planner is to minimize the impact income taxes will have on your overall financial situation.

In fact, the most basic function of a tax planner is to minimize the impact income taxes will have on your overall financial situation.



Thomas Gehrmann (CRD# 6423570) is an Investment Advisor Representative in Colorado Springs, CO and has over 4 years of experience in the finance industry. Thomas Gehrmann has also been a licensed chiropractor in Colorado Springs since the fall of 1999.  For more information visit his website – Thomas Gehrmann.

Published by Thomas Gehrmann

Thomas Gehrmann is a Chiropractor in Colorado Springs and helps in Chiropractic Adjustments using unique and effective approach.