There are so many different job titles that fall under the banner of “people that help with money.” Between Wealth Manager, Financial Planner, Financial Advisor, Client Advisor, Wealth Planner, Investment Advisor and Independent Financial Advisor (IFA), it’s obvious even the industry itself can’t decide on the right name.
The truth of the matter is that there are some pretty clear lines within the industry of what different professionals do, just without that level of clarity when it comes to choosing their job titles.
As always, at Rosecut we are all about ripping up the jargon and laying everything out to you in a clear and easy to understand way. Which makes this a perfect topic for us to dive into.
Essentially we’re going to explain who does what when it comes to managing your money, and what the subtle differences in job titles are likely to mean. This will help you understand exactly what the different professionals can do for you, and what you should and shouldn’t expect from them.
The most straightforward role to start with is that of a Financial Planner, also known as Financial Advisor, Financial Adviser or IFA. These titles are almost always referring to someone who provides financial advice that is regulated by the Financial Conduct Authority (FCA).
The title Wealth Planner or Wealth Manager is sometimes used to describe this role, but it’s less common.
This is investment and financial product advice that can include areas such as pensions and SIPPs, ISA’s, diversified investment portfolios and stocks and shares.
In most cases, the Financial Planner’s speciality is the overall financial plan, for the decades to come in your life, and hopefully, something to leave for your future generations. It paints a picture with various scenarios, and comes down to advice on how much to contribute to a pension or an ISA to meet those goals and objectives, the most tax efficient way to structure investments, how to manage Inheritance Tax or save for private school fees.
In essence, where should you put your money.
There are very strict rules that need to be followed by a Financial Planner. They have to meet minimum educational requirements and be registered with the FCA. In order to stay registered they need to pass annual audits and meet ongoing education requirements every year.
There are a number of different industry bodies that Financial Planners can be a part of. The largest and most well known are the Chartered Institute for Securities and Investment (CISI), Chartered Insurance Institute (CII), and the London Institute of Banking and Finance (LIBF).
Financial Planners meet their educational requirements through these bodies, and progress through various qualifications. The highest levels of education in the CII and LIBF will allow Financial Planners to use the term ‘Chartered’, as in Chartered Financial Planner whereas the CISI also uses the term ‘Certified’.
Financial Planners need to provide comprehensive documentation for any of their advice, in what’s known as a Suitability Report.
As part of this process, a Financial Planner will generally recommend an investment portfolio to their clients. What they generally won’t do is actively manage this portfolio on a day to day basis.
This makes sense. For a start, their expertise is generally around overall planning, tax legislation, cash flow analysis and strategy, not day to day portfolio management.
In addition, a Financial Planner will spend much of their day in meetings with clients. North Korea could invade Canada and markets could crash, all while the Financial Planner is sitting in a 2 hour meeting drinking coffee and speaking to their clients about their holiday.
Clients need someone whose only job is to watch the markets.
That’s why most Financial Planners will have an Investment Manager who looks after the day to day movements of the investment funds. This title can also be Fund Manager, Portfolio Manager, Portfolio Advisor, Investment Advisor or, confusingly, Wealth Manager.
This role is the one who decides how to invest your money and when.
The Financial Planner may provide advice that recommends a portfolio which has an overall allocation to the stock market of 60% of the portfolio. This would take into account the clients goals and objectives, their tolerance to risk, the tax strategies being employed and many other factors.
But the makeup of that 60% will often be the domain of the Investment Manager. One month having a large allocation to the US stock market might be the best option, the next month Japanese markets might look attractive, for example.
This role is sometimes done in-house within the financial advice firm, whereas other companies outsource this role to third party fund managers or investment houses.
Some Financial Planners will also try to be the Investment Manager. It’s not common, but it does happen. At Rosecut, we strongly believe this to be the wrong approach. The roles and expertise may have similarities and crossover, but in reality the skillset can be really quite different.
Would you like to have an accountant that also provided you with legal advice? Or a mechanic who did your company IT? Sure, technically it could be possible, but wouldn’t you prefer to have specialists doing all these things?
When it comes to education, Investment Managers can have a fairly wide range. Some will have studied business and economics at university undergraduate level, others will have completed Master’s or even PhD’s.
Another very well respected pathway is the Chartered Financial Analyst (CFA) qualification. This is notoriously difficult and very well respected in the investment management industry.
The last role to look at is what’s commonly known as a Private Bankers. This role is generally found in retail banking and relates to general banking services rather than investment.
A Private Banker works closely with wealthy individuals to provide them with a great experience in dealing with the bank. They can assist with mortgages, personal loans, credit cards and bank accounts, while also providing introductions to the banks other services such as Financial Planners and Wealth Managers.
The banking industry is one of the worst culprits when it comes to shifting or merging these job titles, so it pays to clarify exactly what someone is able to help you with if you’re looking at starting a new relationship.
As a consumer, this situation can be confusing. When it comes to finding a Financial Planner and making sure they are the right person to provide you with advice, the FCA Register is a great place to start.
It’s really simple. All you have to do is go to the FCA Register website, scroll down and search for the person or company you’re dealing with.
You’ll be able to see the details of whether they’re registered to provide financial advice, which is a great starting point in finding a qualified, regulated Financial Planner.
The second part of this is to look at the company they work for and the investments they offer. You should be able to find the people making the day to day investment decisions and in most cases also see their past performance figures.
Past performance doesn’t guarantee future performance, but it’s one of the only measures we’ve got when it comes to choosing someone to manage your money.
We’re a regulated firm and we’re directly authorised with the FCA and you can find us on the FCA register website shared above.
Rosecut Co-Founder and CEO Qiaojia Li is a Chartered Financial Planner and has an extensive wealth management background in private banks such as Credit Suisse and Coutts. Our in-house Portfolio Manager Daniel Greenough is a Chartered Financial Analyst and has an extensive track record including many years at Barclays Private Wealth.
This means you’ve got access to the best specialist expertise across every part of your financial circumstances, while having the whole team under the same roof, working towards your goals and objectives.
If you want to find out more about how we work, what we do and exactly what we can help you with, book in a no-obligation initial call.