Do I need an accountant or a financial advisor?

1 min readLast updated February 1, 2024by Unbiased team

Discover the fundamental differences between accountants and financial advisors to find the appropriate financial assistance.

Summary 

  • Financial advisors assist clients in managing their resources and achieving financial objectives regarding retirement planning, estate planning, and investment portfolios. 

  • Accountants manage and interpret financial records, prepare tax returns, give tax advice, and may offer guidance on household finances and investments. 

  • Your personal or business needs will determine which professional can provide the best financial assistance. 

  • Unbiased can connect you with a financial advisor perfectly suited to meet all of your financial planning needs.  

What is an accountant, and what do they do? 

If you are wondering whether you need an accountant or a financial advisor, you need to start by knowing the difference between the two. 

When working for an individual, an accountant keeps a record of financial activity, often focusing on a specific period to assist with tax returns and compliance.  

Although an accountant’s role may vary according to their position and experience, some of the typical duties include: 

  • Bookkeeping: Accountants track financial transactions, including income, expenses, and investments, to create a detailed financial record. This serves as the foundation for accurate financial reporting. 

  • Financial statements: They prepare essential financial statements that provide a snapshot of an individual’s financial health and are vital for decision-making and compliance. 

  • Compliance: Accountants navigate the complex landscape of tax laws and financial regulations to ensure that individuals adhere to legal requirements. They prepare tax returns and minimize tax liabilities. However, a financial advisor can also help in this area and ensure you’re paying the right amount in taxes.  

Accountants working for individuals may also do financial forecasting, auditing, general investment guidance, and advice regarding household finances. 

What is a financial advisor, and what do they do? 

A financial advisor looks at the big picture to create financial vehicles to assist clients in achieving their goals for the future, including investments, retirement planning, and estate planning. 

Financial advisors typically work at investment companies, insurance firms, and banks, although there are also many independent professionals with their own advisory services.  

Many types of financial advisors specialize in various aspects of wealth management, including: 

  • Asset managers 

  • Certified financial planners (CFPs) 

  • Chartered financial consultants (ChFCs) 

  • Financial planners 

  • Wealth advisors 

  • Investment advisors 

Financial advisors’ expertise extends beyond the realm of recording financial transactions to encompass strategic decision-making and long-term financial planning.  

A financial advisor’s duties may include: 

  • Financial planning: Financial advisors work closely with clients to determine their financial objectives, risk tolerance, and overall financial situation. They develop comprehensive financial plans, including investment strategies, retirement planning, and wealth management. 

  • Investment guidance: Financial advisors help clients navigate the complex world of investments. They analyze market trends, assess risk factors, and recommend investment portfolios tailored to the client’s objectives and risk tolerance.  

  • Retirement planning: One of the primary roles of financial advisors is to assist clients in preparing for retirement. This involves creating a plan for saving, investing, and managing assets to ensure a comfortable and financially secure retirement. 

  • Estate planning: Financial advisors may prepare wills and other financial documents to ensure loved ones are cared for after clients have passed away. This may also include recommending life insurance products. 

  • Tax planning: Financial advisors will work on specific tax issues based on their client's needs and goals. They can also help with the tax preparation process and ensure their client's taxes are filed correctly.  

What are the overall differences? 

Accountants and financial advisors are both financial professionals who assist individuals in managing their wealth.  

Accountants have licenses to give tax advice and prepare tax returns. They may also counsel clients on tax-saving methods based on their financial situations. However, they may require a financial advisor to implement these strategies. 

Accountants require a bachelor’s degree in accounting to take responsibility for an entity’s financial management. A certified public accountant (CPA) earns their license through experience, 150 hours of post-secondary education, and passing strict examinations. 

Financial advisors don't need a bachelor's degree to practice but must pass the necessary securities examinations. Many financial advisors, such as the Certified Financial Planner (CFP), hold specialized licenses. This involves rigorous exams in several fields of wealth management.  

Financial advisors focus on assisting individuals to reach their financial goals through investments, retirement planning, and tax strategies, to name a few. Accountants focus more on tax advice and preparing returns. They may also prepare clients’ financial statements and maintain their financial records. 

Do you need an accountant or financial advisor? 

Depending on your financial circumstances, you may need to hire an accountant or a financial advisor.  

Follow this guide to determine if you need an accountant or financial advisor: 

Accountant: 

  • Tax season: They help individuals and businesses accurately prepare and file their tax returns, maximizing deductions and minimizing liabilities. 

  • Financial compliance: If navigating intricate financial regulations is a concern, it helps to hire an accountant to ensure compliance. 

Financial Advisor: 

  • Short or long-term financial planning: A financial planner is invaluable when you require assistance with strategic financial planning. 

  • Investment strategy: For those seeking guidance on managing an investment portfolio, financial advisors offer insights into market trends and risk management. 

Both an accountant and financial advisor: 

  • Business owners: Accountants handle day-to-day financial transactions and compliance. In contrast, financial advisors pursue long-term business strategy and growth planning. 

  • High-net-worth individuals: If you have a complex wealth management profile, the accountant ensures financial accuracy and compliance, and financial advisors dedicate themselves to your intricate investment portfolio. 

How to find a financial advisor 

In the vast landscape of financial management, accountants and financial advisors serve distinct yet complementary roles.  

If you’re seeking expert financial advice, Unbiased can match you with an SEC-regulated financial advisor. You can learn more about managing your money and meeting your goals, setting you up for a more successful financial future. 

Match with a financial advisor now 

Writers

Unbiased team

Our team of writers, who have decades of experience writing about personal finance, including investing and retirement, are here to help you find out what you must know about life’s biggest financial decisions.