Financial Advice Blog

How is an accountant different from a financial adviser?

Knowing whether you need a financial adviser or an accountant can often be a tricky distinction for many people. Learn about the differences and how to decide who to work with to ensure your financial future is set up for success.

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.

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