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Financial Advisor, Accountant, or Both?

| August 24, 2017
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What Do I Need? Financial Advisor, Accountant, or Both?

There comes a time in most families’ financial planning when it’s necessary to seek advice and assistance from the experts. When searching for fiscal guidance for yourself or your business, you may consider a financial advisor, an accountant, or both. Advisors and accountants can be valuable tools for growing your personal or business funds and maximizing your tax benefits. It’s important to take the time to understand how these two roles are similar and different before pursuing services from either or both professionals.  

The Many Roles of a Financial Advisor

When you hear financial advisor, you probably think about investments. While this association is valid, financial planners do more than just invest your money. Depending on whether you need assistance for your personal wealth or your business, an advisor’s role can be different.

Helping Individuals and Families

Your personal finances are ultimately your responsibility. This task can be a heavy burden to bear alone. Seeking support from a skilled financial planner can be a smart move for you and your family; a decision that can boost your financial capacity and lessen the weight of this responsibility.

Using a goal-oriented and holistic approach, financial advisors attend to the big picture of your fiscal portfolio. While working to expand wealth effectively and efficiently, they attend to clients as individuals. This practice is crucial as your background, needs, and goals are unique to you and your family and should be treated accordingly.

There’s a laundry list of responsibilities financial planners can assume. These tasks include:

  • Organizing and managing finances
  • Planning for retirement
  • Funding for college
  • Growing and protecting investments
  • Balancing goals and risk tolerance
  • Family and estate planning
  • Examining insurance options (disability, life, long-term care)

Eliminate Emotion

A major objective for financial advisors is to help remove the emotion from your financial decisions. Money is strongly tied to our emotions, and mixing money and emotion can easily lead to detrimental outcomes. It is human nature to carry our emotions with us throughout different areas of our lives. It’s important to recognize this tendency and work to eliminate the emotional component surrounding our money. A financial planner can work with you to identify reasonable options for your finances, and transition you into becoming a more logical, lucrative, and productive investor.

Hands-On Approach

Whatever your needs are for a financial advisor, it’s imperative you find an individual or group that’s willing to take the time to get to know you and learn what you value and where you see yourself going in the future. You need support that will help you assume reasonable goals that align with your ideals and capabilities. You want a mentor who’s willing to be hands-on in their approach in crafting a financial plan that makes you feel satisfied and secure. Change is inevitable in everyone’s life. You need a financial expert who carefully monitors the progress of your investments and makes modifications when necessary to ensure the most productive results.

Benefits for your Business

Financial advisors can be a great resource to tap into if you are starting or maintaining a business. They are equipped with knowledge and experience to help you make profitable decisions as you select a business structure and implement strategies and timelines to ensure wealth accumulation and protection for your business.

In an effort to minimize costs, business owners may bypass hiring a financial advisor. This can be a huge mistake especially if this is your first time operating your own business. A financial consultant can alleviate you from wide-ranging tasks as they assist you in maximizing your time and your money. Their expertise can direct the path of your business to deter risks that are not prudent and heighten opportunities that are in your favor.

The Duties of an Accountant

Accountants are necessary if you own and operate a business or have a variety of assets to manage. Just as financial advisors are associated with investments, accountants are connected to taxes and bookkeeping. Accountants are tax specialists and are most often enlisted to assist people in preparing and presenting their tax returns to the Internal Revenue Service (IRS).  

Like financial advisors, accountants can take on a multitude of roles. These tasks include:

  • Preparing taxes (business and personal)
  • Describing and clarifying tax laws
  • Providing tax advice
  • Representing clients during audits
  • Preparing financial accounts for businesses
  • Offering guidance on business structure
  • Predicting cash flow

Accountants are task-oriented professionals and seek opportunities that will help you get and stay ahead. They are trained to expand your bottom line and improve the overall profit and security of your business and your investments.

Certified Public Accountants

Not all accountants are certified public accountants (CPAs). Earning the CPA credential is no easy task. It entails a substantial amount of education and experience as well as a commitment to continuing professional development. CPAs must be licensed by the state(s) where they practice. As CPAs offer tax preparation advice, they aim to maximize tax benefits and assemble a plan that best suits you and your business. Their chief concern is minimizing your tax liability.

In Summary

Financial advisors and accountants both offer a valuable assortment of services, experience, and proficiency to clients. While employing one professional to manage all your financial and business needs sounds simple, it isn’t necessarily the best approach for expanding and safeguarding your wealth. Ideally, you need a panel of experts to support your goals and objectives. Accountants and financial planners can offer complementary roles to business owners. This combination can be a great way to heighten the productivity of your investments and your future.

Ultimately, you want to enlist the help of advisors who you can trust and whose skillsets match your needs and your potential. Contact Chesapeake Investment Planning and receive the care and direction you need to make financial decisions that are fruitful for you now and in your future!   

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC.  Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS.  Chesapeake Investment Planning, LLC is not affiliated with Kestra IS or Kestra AS.

Todd Wilhoit contributes articles for Investopedia.com. See this one and more here.

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