What is the difference between a financial advisor and a financial planner?

Like many great ideas, the topic of this blog first came to mind in a pub.

We were in Dublin at the Irish Pension Awards discussing the differences between a can of Guinness and draught pint of Guinness. During lockdown we thought cans were the best possible option, because without access to a pub they genuinely were.

However, once we had a draught pint again we realised just how good it really is. It’s not just about the drink itself – it’s the perfect pour, the foam/liquid ratio, the glass, the ambiance of the pub, the friendly smile from the bartender who hands it to you, and the glorious first sip. It’s the whole package.

It’s a matter of need

 
What does Guinness have to do with financial advice? In a literal sense, very little. But the comparison of a can vs a draught pint and a financial advisor vs a financial planner is one that has many similarities.

If you want to purchase a generic financial product, a financial advisor is right for you. They can fulfil your every need. Perhaps you just want to set up a pension, or you may have some extra funds that you want to invest. It’s a straightforward, un-tailored product purchase.

If a can of Guinness suits your needs (a garden party or a lockdown, let’s say), then a can is the right choice for you.

The perfect pint

 
The key difference between a financial advisor and a financial planner is that the latter takes a holistic approach. A financial planner works with you – your life, your family, and your needs, goals, and dreams – at the centre of everything they do, rather than the product. It’s an inside-out approach, rather than outside-in. The result is fully tailored to you – no pre-packaged products here.

When you become a client here at Metis Ireland, we request that you complete a “Getting to Know You” form. The information you provide us with gives us more detail about you and your family. You will outline your dreams, goals, and ambitions. Then, we will then build you a plan based around them.

This is called your Metis LifePlan and it is 100% bespoke for you. Just like your draught pint, it has been poured for you and you only.

How we arrange your money

 
We aim to arrange your finances appropriately to allow you to hit those dreams, goals, and ambitions. Often this involves investing your money in a range of funds to enable it to grow. However, that’s not the only solution we recommend. It all depends on what you want to achieve.

Let’s say your big dream is a family holiday to New Zealand, but you want to do this in two years’ time. We’d suggest keeping this money on deposit rather than tying it up in investment funds.

Maybe your main goal is to retire as early as possible. In this instance, we’d look at what you can afford to contribute to your pension every month and/or year and discuss the possible trade off of you retiring earlier.

Arguably the most important part of the financial planning process is the annual review. We all know how much life can change unexpectedly in a year. Sometimes people’s dreams, goals and aspirations change too. The annual review meeting is our opportunity to discuss and update your Metis LifePlan so it continues to be specific to you and your plans.

What next?

 
One thing’s for sure: whether you choose a can of financial advice or a draught pint of planning, you’re putting yourself in a better position. After all, it means you’re starting to think more about the future of your finances. A step in the right direction is a step closer to financial independence.

If you’ve any further queries on the above or would be interested in your own financial plan, please get in touch via rqueally@metisireland.ie.

 
Ronan Queally
Financial Planning Associate