Financial planners, accountants, stockbrokers, bank managers, mortgage brokers … each has their own set of specific skills and can help you along your financial journey.
When it comes to investing in your financial future, there are many professionals that can help you on your way. Financial planners, accountants, stockbrokers, bank managers, mortgage brokers and then some. Each has their own set of specific skills and can help you along your financial journey.
However, there are some key differences to the skill set, advice and information that each of the above are able to legally provide you. Moreover, you as the ‘client’ have a fiduciary responsibility to yourself (as the end beneficiary of the next set of actions you take on your financial future) to understand where the services of one and the other interact, cross over and should be kept apart to maximise their effectiveness for you.
How are accountants and financial planners different?
We all know around July each year we need to start collecting our receipts, reviewing our car travel for work and book an appointment with an accountant to do our tax. Those who may run their own business understand that there is a lot more to accounting for small businesses, such as running regular BAS statements, business reconciliations, payroll tax submissions and much more.
In addition, if you are planning on purchasing a house in 1, 3, 5 or even 10 years, an accountant can make sure all your books are in order to achieve that. They can sign off your financial statements and submit information on your behalf once they have clarified it to the ATO.
Meanwhile, a financial planner is less transactional, less about what has been done in the last month, quarter, year or reporting period. They are more about planning for the future, your future.
Their services include recommending investment opportunities, diversification of your assets, planning for your retirement and setting yourself up with a plan for financial security into the future.
Why do you need both an accountant and a financial planner?
To use a sporting analogy, in the game of cricket you need a bowler and a batsman. Your financial future is no different, you can just have an accountant (bowler) putting your taxes in each year, ensuring that you are compliant and everything is up to date – in other words - bowling the ball down the pitch.
This is fine, you will do as you have always done, in fact, you will do as well as the majority of the population who don’t understand the true benefits of a financial planner.
However, if you add the batmen to the game (in this instance, the financial planner), they are there to take the information, situation and available options and provide an array of investment options (shots) that you can use to score runs on your financial scoresheet.
Accountants and financial planners are not in competition with one another, quite the opposite. They work with one another to review your current financial situation & compliance to tax (accountant), then use this with your future potential earnings, current risk aversion and a range of other factors (financial planner) to set the best plan out for you as an individual.
Surrounding yourselves with two financial experts – such as an accountant and financial planner – also has the added benefit of both having access to your records, and keeping each other accountable for their choice of investment opportunities, potential rewards, also if you have any reservations of one or the others service, you have the option to communicate this and seek independent advice.
Accountants and financial planners are both vital to your future financial wellbeing, the sooner you have both working together in your best interests, the better you will see your financial potential.