The Difference Between a Financial Planner and a Personal Budgeting Consultant

There is a widespread misunderstanding about the differences between a financial planner and a personal budgeting consultant, particularly, people often misconstrue what Financial Planners (also known as Financial Advisors) actually do.

Financial Planners are predominantly sales people and product specialists in the areas of investments (including superannuation) and insurance. Their job is to sell these products to you and, to some extent, subsequently administer them for you. The strength of their expertise is their in-depth product knowledge and the limit of what they do is that they – as a profession – don’t actually plan your finances in the true sense of the words. Alternatively, a personal budgeting consultant assesses your current financial situation and optimises your budget according to your financial goals (this includes management of your debts and dealing with your creditors).

The investment and insurance matters that a Financial Planner deals with is a ‘macro’ financial issue, however day-to-day budgeting and forecasting undertaken by a Financial Consultant, is a ‘micro’ financial matter. For more efficient money management, it is important to master the micro, before then addressing the macro monetary issues. Anything else is akin to putting the cart before the horse.

So if you’re looking for someone to plan your finances, a ‘Financial Planner’ really isn’t what you’re looking for. However they are well-versed in the areas of insurance and investment opportunities if that’s what you’re after. If you’re looking for someone to help you save money, pay off your debts or assist you in optimising a budget, you’re better off using the expertise of a personal budgeting consultant.

After seeing a personal budgeting consultant, if you subsequently find yourself in front of a Financial Planner, there will be no void to fill in terms of your lack of financial understanding. You won’t require a Financial Planner to go beyond their product expertise and as such, you won’t be obliged to follow their recommendations. In short, you will be the one who decides what is right for you and what you can actually afford to commit to – in terms, for example, of superannuation, investments, life or income protection insurance.