The difference between financial analyst and financial planner is often unclear to business professionals even though they understand that both professions require working knowledge of financial concepts and interpersonal skills. According to labor market statistics, there is a high demand for people with the quantitative problem solving skills that are typical of finance degree graduates. Many of today’s finance graduates have also taken advantage of supervised internships, special consulting opportunities and study abroad programs that were offered through their universities, and they are prepared to meet industry expectations for creative financial problem solvers who think globally and act strategically for their customers. While these new finance professionals usually have the skills to fill the roles of either financial planner or financial advisor, here are some key differences in the job functions, requirements and employment prospects of the two professions that graduates with finance degrees should consider before choosing career paths.
Financial Planners
Financial planners help clients to establish financial goals and reach them through a variety of financial products and strategies. While some businesses seek the services of financial planners to help strengthen their company growth strategies, the clients of financial planners are usually individuals who have varying degrees of knowledge about financial principles and available products. Financial planners must have a thorough understanding of financial management strategies and be able to communicate the value of financial concepts to non-finance professionals. These planners should also possess interpersonal skills that allow them to actively listen to their clients so that they can suggest the appropriate financial products to meet their clients’ needs. According to BankRate, examples of the types of client requirements that financial planners help to meet are those of young professionals who need to set up mutual funds for their retirement years, heads of households who want to manage financial risks to their families through insurance and senior business professionals who want to make their retirement money work harder for them. Unlike their financial advisor colleagues, financial planners are usually not required to register with state or federal investment regulatory authorities. However, using the services of a Certified Financial Planner can give prospective clients a certain level of confidence that they are doing business with a competent and trustworthy financial services professional.
Financial Analyst
Financial analysts evaluate the fiscal landscapes of the market, industries, companies or business divisions to gain insight into trends that lead to opportunities or identify risks. Financial analysis functions are needed by all businesses to guide investment decisions or reduce costs, and it is not industry specific. However, financial analysts who work for financial services companies most often use financial analysis tools and techniques to evaluate stock performance, bond markets and other investment products. These finance professionals recommend various investment products to businesses and individuals based on customer needs and their systematic financial assessments.
Career Outlook for Both Professions
According to the Bureau of Labor Statistics, projected job growth for financial planners is at 27 percent which is much faster than the average for all professions surveyed. According to industry sources, the high estimated growth rate for this career is a result of an increase in baby boomer retirements which happens to coincide with the retirement of many seasoned financial planners. These newly retired boomers need help setting up new investment accounts that allow them to live off some of their savings while still earning some interest on unused portions. Financial planners earned median annual salaries of $67,520 in 2012. According to the Bureau of Labor Statistics, the projected job growth rate for financial analysts is at 16 percent which is still faster than the average for all professions surveyed. Financial analysts earned median annual salaries of $76,950 in 2012.
Related Resource: Become an Investment Banker
Conclusion
The job functions of financial planners and financial analysts are similar, but they differ primarily by the type of customers that they serve and the kinds of financial solutions that they promote. When it comes to excellent employment prospects, the difference between financial analyst and financial planners are not so distinct.
