Most investors are confused by the roles of financial planners and financial advisors. In fact, over 75% of investors say they do not know how they differ. They believe these are two roles that provide the same services. Not exactly!
One source of the confusion is anyone can call themselves financial planners whether it is true or not. There is no regulation that prevents this deceptive sales practice. Not too long ago, 70% of planners were actually insurance agents who called themselves financial planners for two reasons. First, the role of the planner was more acceptable to people than the role of agent so there was less sales resistance. Second, they used the financial plan to sell large amounts of insurance products (annuities, life insurance, long term care). Again resistance was lower because the clients’ financial plans recommended the products not the agent/planner. Continue reading