Over the years some of the most common questions we often receive are around the difference between financial advisors and financial consultants, with them sounding similar in some ways but actually being quite unique, and this blog post hits on that.
If we weren’t thinking about the financial industry in particular, an advisor and consultant are pretty much synonymous, however in the finance world that’s regulated by the SEC those two classifications have totally different meanings/obligations/roles.
Without getting too much into the weeds, the main difference between a financial advisor and consultant is around their particular role in making decisions while also managing money.
Whereas a consultant is simply providing information to help power decisions, financial advisors and internal teams actually make the final decisions in the end, though it’s always good to get outside feedback because all companies suffer from operating with blinders at times.
Being laser-focused is key though while going down that tunnel you also miss out on some of the things happening around you, and that’s where bringing in an outside consultant with their radar operating across all areas can be worth its weight in gold.
In a nutshell, think about a financial consultant that guides hedge funds, family offices and other institutional investors as the eyes and ears with their finger on the pulse vs the one making final decisions/transactions.
Hope this helps and if you want to discuss more let’s connect.