Is Personal Financial Planning a Consulting Service

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Is Personal Financial Planning a Consulting Service? An increasing number of people are turning to financial planning as a means to ease their stress over money matters. Financial consultancy is an area that offers professional advice with regard to investment and financial planning. While many perceive this as being synonymous with traditional accounting, there still remain some major differences between the two professions.

Personal Financial Planning has been described as a service used by professionals to provide tailored advice for individuals and families on major life events related to financing. Financial services consultant is a job title that many don’t understand what it means. In reality, it can be used to describe someone who does anything from helping clients set up investment plans for their retirement to helping people protect what they already have in a will or trust. Here’s some information on the different types of financial consultants and what they do.

Given the phenomenal growth in the wealth management industry and a potential opportunity to manage one’s own money, do you see a role for personal financial planning as an independent consulting service? A financial services consultant can help you uncover ways to improve your finances and assist with short-term and long-term financial planning. Consultants offer valuable insights into areas such as financial education, asset management, insurance, retirement planning and tax strategy.

A financial consultant is essentially the same as a financial advisor. They often offer a number of services, with their financial advice being based on the client’s specific needs and goals. In some cases, a financial consultant may have more financial planning experience than the typical financial advisor. Financial consultants usually provide investment services as well, though.

What Is a Financial Consultant?

“Financial consultant” is a somewhat antiquated term that’s largely been replaced by the term “financial advisor.” Financial consultants may work for a firm or as a self-employed contractors, and their clients may be companies or individuals.

In short, financial consultants offer personalized advice to help investors build wealth. They may offer financial planning, identify well-suited investments and guide insurance decisions. They often direct the buying and selling of investments, like stocks and bonds, on their clients’ behalf. Some may also sell financial products.

A financial consultant usually meets with clients to assess their financial situation before they make any recommendations. Any time a client experiences a major life change (marriage, job change, retirement), they’ll likely request another meeting.

Consultants also spend time marketing their businesses. They often travel and work outside normal business hours to accommodate their clients’ schedules.

What Do Financial Consultants Do?

Financial consultants or advisors offer clients a big-picture analysis of their finances. They break down different aspects of a client’s financial life, including assets, expenses, and income, and help them create a financial plan to reach different types of goals. These goals can be focused on specific milestones like buying a home, relocating to a different city, retirement, and paying for the education of a grandchild.

You should also note that financial consultants or advisors offer clients different types of services depending on their specialization. As an example, a certified financial planner helps clients in many areas of financial planning, including taxes, retirement, estate planning, and insurance. But a chartered financial analyst focuses on portfolio management and financial analysis.

For a quick reference, the table below breaks down four more types of financial consultants or advisors and their common services:

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Financial Consultants vs. Financial Advisors

SmartAsset: What Is a Financial Consultant?

The terms financial consultant and financial advisor are almost synonymous. In fact, many financial advisors actually refer to themselves as consultants.

Both financial consultants and financial advisors help others make educated financial decisions, particularly investment decisions. Many are experts in comprehensive financial planning. You’ll likely need to look into financial advisors’ education, experience and certifications to differentiate which one is right for you.

Both consultants and advisors may have studied economics, accounting or finance in college. It isn’t uncommon for them to earn MBAs, and many hold advanced certifications. One of the most highly regarded certifications is the certified financial planner (CFP) designation, but there are many others of value.

For instance, the chartered financial consultant (ChFC) designation was introduced in 1982 as an alternative to CFP. The Institute of Financial Consultants issues ChFC designations after a candidate has completed five online modules, done 20 hours of continuing education and passed an online test.

The core curriculum for the CFP and ChFC designations are the same, but ChFC certifications require a few additional elective courses in financial planning. The consultant designation doesn’t require a comprehensive board exam like the CFP designation does though. Both CFPs and ChFCs are qualified to analyze your financial situation and give advice.

When Do You Need a Financial Consultant or a Financial Advisor?

Depending on your needs and goals, you may want to work with a specific type of financial consultant or advisor to help you reach different milestones in your financial life. You should keep in mind that the most practical time to hire a financial consultant or advisor will be when you have enough money saved to invest in those milestones.

One example for when a financial consultant or advisor could be useful is when you have to manage multiple retirement accounts. Financial advice may not be needed when you first open a 401(k). But as you move on through different jobs, and you have to juggle multiple accounts and additional financial concerns besides retirement could surface. A consultant or advisor could help roll over your accounts to create a financial plan that optimizes different investment and tax strategies.

If you are starting to build a portfolio, a consultant or advisor can help you manage and review it to keep on track with retirement and other financial needs and goals. And if you happen to lose money on your investments, a consultant or advisor can also help you re-evaluate your portfolio and diversify it to increase your net worth over time.

Financial consultants or advisors can help you create and manage an estate plan to pass on assets to loved ones or charitable organizations with minimal tax burdens. An estate plan not only protects inherited assets, but it can also implement a strategy to help them grow over time and ensure that your legacy can last for generations to come.

How to Find a Financial Consultant or a Financial Advisor

SmartAsset: What Is a Financial Consultant?

Everyone has a unique financial situation. Some financial consultants and advisors have a specialty or only work with certain levels of investors. You’ll need to find a financial advisor who works for you. You can use online search tools or ask for referrals from friends and family.

Once you have a few options, look them up online and get a sense of their services and experience. Then, prepare a list of questions to ask about their fee structure, account minimums, expertise and certifications and investing philosophy. You’ll want to meet a few options in person before you make a decision.

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Brief History of Financial Advisor Terms

Originally, the person who did the job described above was referred to as a stockbroker or just a broker. At some firms, they were called account executives or registered representatives. Even retail bankers, insurance agents and accountants offered financial products and advice.

The investing industry went through a re-branding in the 1980s. Many financial professionals changed their titles from stockbroker or account executive to financial consultant. They hoped this would shift their image from transaction-driven salesmen to highly trained financial professionals with valuable investment skills and advice.

The title of “financial consultant” didn’t stick for long though. By the 1990s, people began to refer to the role of a financial advisor. Because a consultant’s advisory skills were chiefly important, this appears to be a natural progression.

Eventually, pressure mounted for these professionals to adhere to fiduciary standards. There previously hadn’t been much coordination or regulation among professionals. Thus, they developed a reputation for giving biased advice to sell more products even if the products didn’t fit the needs or circumstances of the consumer.

What are the Benefits of financial planning?

There are numerous practical benefits to financial planning. It helps you to:

  1. Increase your savings
    It may be possible to save money without having a financial plan. But it may not be the most efficient way to go about it. When you create a financial plan, you get a good deal of insight into your income and expenses. You can track and cut down your costs consciously. This automatically increases your savings in the long run.
  2. Enjoy a better standard of living
    Most people assume that they would have to sacrifice their standard of living if their monthly bills and EMI repayments are to be addressed. On the contrary, with a good financial plan, you would not need to compromise your lifestyle. It is possible to achieve your goals while living in relative comfort.
  3. Be prepared for emergencies
    Creating an emergency fund is a critical aspect of financial planning. Here, you need to ensure that you have a fund that is equal to at least 6 months of your monthly salary. This way, you don’t have to worry about procuring funds in case of a family emergency or a job loss. The emergency fund can help you pay for varied expenses on time.
  4. Attain peace of mind
    With adequate funds at hand, you can cover your monthly expenses, invest for your future goals and splurge a little for yourself and your family, without worry. Financial planning helps you manage your money efficiently and enjoy peace of mind. Don’t worry if you have not yet reached this stage. If you are on the path of financial planning, the destination of financial peace is not very far away.

Financial planning for life goals

The importance of personal financial planning in India cannot be ignored. It is not just about increasing your savings and reducing your expenses. Financial planning is a lot more than that. This includes achieving your future goals, such as:

  1. Wealth creation
    The rise in the price of everyday items means that if you want to maintain or increase your current standard of living in the future, you need to create a sufficient corpus of wealth. You may also want to purchase a better car or a new house in the future. All this requires money, and it merely highlights the importance of wealth creation. It is possible to achieve these goals by carefully investing your money in the right avenues. Equity mutual funds can be a suitable option for long-term goals. These funds could help the investor to accumulate wealth in the long run.
  2. Retirement planning
    Your retirement maybe 25 or 30 years in the future. But that does not mean you plan for it when you retire. To enjoy a happy and comfortable retired life, you need to start building your safety net right now. Planning at an early stage in life can help secure your future against financial uncertainties. Also, you invest lesser amounts if you start early and gain from the power of compounding which helps to build a large enough corpus over the 25-30 year period.
  3. Child’s education
    Education has become very expensive, not only in India but across the world. And in the future, this cost is only going to rise. This is why it is necessary to start planning from the moment your child is born. Calculate how much you wish to earn and start investing in long-term investment avenues that can help you achieve this goal. You can approach a financial advisor for advice if you are not sure how to proceed further.
  4. Saving tax
    Every year, you are probably paying a substantial amount as tax. But you can now lower your tax outgo legally. The Indian Income Tax Act provides various provisions for people to reduce their tax outgo. By planning your taxes in advance, you can identify the best avenues to invest your money and reduce your taxable income. Mutual funds provide a tax-efficient avenue for investing in your life goals.
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Do I need a financial consultant?

Whether you need a financial consultant depends on your circumstances. If you have a fairly simple investment portfolio, you could use a Robo-advisor as a low-cost way to manage those investments if you don’t feel comfortable doing it yourself.

If your investments are somewhat complex, or you need help on topics other than investment management — like estate planning, tax help or paying off debt — it may be worth working with a financial consultant, or looking into online financial planning services.

It may be a good idea to get some advice from a financial consultant when you experience major life changes or events. Getting married, having a child or changing your job can have serious implications for your finances. Talking with a professional can help you navigate these changes and make adjustments to your overall financial plan.


Financial planning isn’t an exact science, but there are a few core principles to follow when planning for the future. You should always consult with a professional financial planner or adviser when creating financial plans because his or her expertise will help you make better decisions about your life.

Personal Financial Planning is a consulting service that helps people plan their finances better. It’s an often misunderstood term, sometimes wrongly defined as financial planning or wealth management. Actually, personal financial planning is a concept of providing advice and guidance on a wide range of matters relating to finance such as investments, taxes, retirement and home loans among many others

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