Financial Planners and Financial Advisors
If you’re looking to grow your wealth or plan for retirement in Singapore, you’ve likely come across the terms “financial planner” and “financial advisor.” While they may seem similar, there are important distinctions between the two, especially when it comes to regulations, services, and qualifications in the local context.
For many people, these two terms are often used interchangeably, which creates confusion. Both financial advisors and financial planners are professionals who provide financial advice and guidance, but their roles, qualifications, and areas of focus differ in key ways.
Task & Responsibilities
Financial Advisors generally focus on recommending financial products such as insurance policies, unit trusts, and investment-linked plans, their expertise are typically transactional and product-specific.
Whereas Financial Planners take a more holistic approach, they help clients plan and map out long-term financial goals including retirement, education, estate planning, and cash flow management. They may also incorporate investment planning but within the context of a broader strategy.
Fiduciary Duty
A fiduciary is someone who is legally and ethically bound to act in the best interests of their client.
Financial Planners, especially those who hold certifications like CFP, are typically held to a fiduciary standard, meaning they are obligated to put your financial wellbeing above any commissions or incentives.
But Financial Advisors may or may not be fiduciaries, depending on their licensing and the firm they work for. Some advisors are tied to specific product providers, meaning they have to cater to both the needs of both sides, which could create potential conflicts of interest.
Certifications & Regulations
Under the Financial Advisers Act (FAA), “Financial Advisor” is a regulated term in Singapore; they must be licensed by the Monetary Authority of Singapore (MAS). They are required to pass relevant exams and be appointed by a licensed financial advisory firm or insurance company.
Financial Planner, on the other hand, is not a strictly regulated title in Singapore. However, many serious professionals pursue international certifications such as the Certified Financial Planner (CFP), which ensures a higher standard of ethical and professional practice.
Remuneration
For Financial Advisors/Planners they are usually compensated one of three ways:
Hourly or Flat Fees – Common among independent planners offering objective advice.
Commission-Based – Common among advisors tied to product providers; they earn a percentage of the financial products sold.
Fee-Based (Hybrid) – Combines both advisory fees and commissions.
Understanding how your financial professional is compensated helps you evaluate potential biases and ensure transparency.
To Summarise the Differences:
1. Financial Advisor (FA) – Broad Regulatory Role
In Singapore, “financial advisor” is a regulated term under the Financial Advisers Act (FAA), governed by the Monetary Authority of Singapore (MAS). Financial advisors typically provide advice on investment products, insurance, and wealth accumulation strategies. They must hold a Financial Adviser’s Representative (FAR) license and may be affiliated with financial advisory firms or tied agencies.
2. Financial Planner – Specialised in Holistic Planning
Whereas financial planners in Singapore focus on long-term financial goals like retirement planning, children’s education, CPF optimisation, and estate planning. While the term “planner” isn’t strictly regulated, many reputable financial planners hold international certifications like Certified Financial Planner (CFP), and they often take a more comprehensive, goal-oriented approach to your financial health.
When to Choose a Financial Advisor vs. Financial Planner
With that said, under what condition should you be approaching and employing either of these professionals when looking for financial products and to receive advice?
Choose a Financial Advisor if:
- You need help selecting specific financial products
- You’re looking for insurance coverage or investment-linked policies
- You want product recommendations tailored to your risk appetite
Choose a Financial Planner if:
- You’re planning for long-term goals such as retirement, children’s education, or estate planning
- You want a comprehensive financial strategy that covers budgeting, CPF utilisation, and tax efficiency
- You prefer objective advice not tied to the sale of financial products
Here are some scenarios to better explain which professionals should you approach:
Retirement Planning / Wealth Management
When planning for your Retirement or Wealth Management, you should approach a Financial Planner, Financial planners are better suited for long terms and holistic strategies like retirement planning, CPF optimization, and legacy planning. They can help you forecast your future income, adjust saving goals and allocate investments to better match your retirement timeline.
Investment Planning
Financial advisors can help recommend and sell investment products like unit trusts, ETFs, they would first assess your risk profile, time horizon and only then suggest appropriate actions for you to decide.
Insurance Coverage
For life insurance, health insurance or any more critical illness plans, financial advisors are often the go to professional as often they are tied to insurers or a part of financial advisory firms, They are product trained and are licensed to recommend policies to better suit your needs
Financial Advice
As for general financial advice it’s fully dependent on what you’re planning to enquire. If it’s for comprehensive guidance on budgeting, savings, tax strategies, and life goals, Financial Planners are your friend.
But if you’re seeking advice related to a specific product or investment option, a Financial Advisor may be more appropriate, as they would have a deeper understanding of their offerings and investment schemes.
Ultimately, choosing between a financial advisor and a financial planner comes down to your current needs and long-term financial goals. In many cases, people benefit from working with both an advisor for specific product recommendations and a planner for overall strategy.
Make sure to verify your advisor’s or planner’s credentials, ask about their compensation model, and understand their approach before committing. The right professional should not only be qualified but also willing to act in your best interest.
The content provided in this article is for informational purposes only and does not constitute financial, investment, or legal advice. While we strive to provide accurate and up-to-date information, readers are encouraged to consult with a licensed financial advisor or professional before making any financial decisions.
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