Geller Law
Financial advisors and planners use all sorts of self-adopted titles for sales purposes. They also use an alphabet soup of designations, also to self-promote. Two of the common categories used are "financial advisor" and "financial planner" or like names. What's the difference? Short answer: depends not on their title or their credentials but on what they actually do for you.
In most Canadian jurisdictions, individuals who call themselves "financial advisors" and "financial planners" may not need to register with the local securities commission if they don't offer investment advice or sell securities. Many do register so that they can increase what they earn off of you by selling you stocks, bonds, mutual funds, ETFs, and exempt market products.
Recently Ontario regulated these titles, by the broadest granting of the right to use these names. For political reasons, they regulated titles using the lowest common denominator of skills. The result: these titles are by no means reflections of the skills required to provide quality services outside of Quebec.
There are a few legitimate financial planning designations. To see what you should expect at a minimum from a financial planner, see: https://www.fpcanada.ca/canadian-public/standards-and-enforcement. For many who use this title, it is little more than a sales prop. In many of the files we review, the so-called financial planner did not meet the FP Canada minimum requirements for a financial plan. In sales terms, they used a bait-and-switch technique to get you to sign on for their services.
As for financial advisors, the threshold is even lower. In many cases, financial advisors are salespeople with a better title. Some bank-owned dealers' financial advisors can only sell their own company's products - usually higher fees and lower quality products - a crazy idea that puts the dealer's interest in earnings as a priority over your best interests. Other advisors can only sell mutual funds, with again higher fees - this makes no sense for investors when low-fee ETF options can offer the same products. The most concerning is the exempt market (private equity for the retail investor) which is burdened by the direct and indirect layering of high fees and, in most cases, unrelenting conflicts of interest (often denied in writing).
Fees matter. Diversification matters. Planning matters. If you receive a robust and highly customized financial plan that focused on debt reduction and savings before investing, then you receive something of value. If you received a template long document that you didn't understand, then you were sold a product that you didn't need.
So what is the difference between financial planning and financial advising? The answer is almost anyone can be a financial advisor. They are slightly qualified salespeople. The answer is also that financial planners who actually provide financial planning can add value. The question remains whether the financial planner added value or was just a salesperson with a fancier title.
