What Is The Difference Between A CPA And A Financial Advisor
As a certified public accountant, I am often asked what the difference is between a CPA and a financial advisor. Because of the frequency of this question, I thought I would take a moment to discuss the similarities and differences. Although there are many similarities, there are also some major differences that you need to know about and consider before deciding who you need to hire to work with your money.
Stockbroker versus Financial Advisor
First, I want to talk about the difference between a stockbroker and a financial advisor because people often think they are one and the same. A stockbroker buys and sells things (stocks, bonds, mutual funds). A financial advisor will do trading, but also look at other ways to invest their client's money.
What is a Financial Advisor?
Along with trading, a financial advisor will look at estate planning. Many financial advisors will also have their clients look into gold and foreign currencies. They have a short-term and long-term view on their clients' money.
Part of their business includes preparing for potentially significant financial changes that will occur after their clients retire. Financial advisors want to help their clients prepare correctly well before that retirement occurs. A financial advisor is great at looking at the various ways to diversify a client's money and investments, and track how those different ways can or will affect them in the long run.
How is a CPA different?
A certified public account is better known for handling taxes. Along with taxes, they are known for dealing with audits, whether they audit a business or represent a business in an IRS audit.
Some CPA's are trained and qualified in offering business advice on where to cut costs, and how to turn your business around. With that said, it is important to remember that this is not a standard among CPAs; you need to make sure you ask your potential CPA about their background, training, and specialized or continuing education standards they follow before taking too much advice from them.
Can They Be the Same?
The part that confuses people is that a good and experienced CPA can overlap with a financial advisor and vice versa. The best way to remember the difference is to think about the real numbers and current state of things when thinking about a CPA, and the long-term "if" and "then" ideas when thinking about a financial advisor.
If you are not sure if a CPA can suit your needs, feel free to contact a CPA in your area today. Remember, when it comes to your money, you need to make sure you are working with and taking advice from the person who can best meet your needs.
About the Author:
Reno CPA Tim Nelson has been helping individuals and businesses with their tax preparation and financial planning for years. Tim has a passion for numbers, so that you don't need to. Visit Tim Nelson's Website to download the FREE Business and Tax Preparation Organizer.
To see what else Tim is talking about, visit Tim's Blog.
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