On the surface, accountants and financial planners are two distinctly different occupations. On the one hand, accountants focus on recording, summarizing, analyzing and reporting on a business's financial transactions and are a virtual requirement for publicly traded entities. Financial planners, on the other hand, specialize in tax planning, portfolio management, and retirement planning.
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Both certified public accountants and certified financial planners have their own degree requirements and sets of tests before certification; accountants, however, need to hold an advanced degree to certify, whereas financial planners can qualify for certification with an accredited bachelor's degree.
There are, however, plenty of overlaps between financial planning and accounting. Whether through taxes or investments, both are heavily geared toward providing their client with a big picture perspective of their finances and to maximizing potential cash flows and revenue streams. While the need for certified public accountants may be reserved for high net worth individuals, certain tax situations that become complex enough to need a certified public accountants may also require the assistance of a financial planner.
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In response, many certified public accountants have themselves decided to diversify and become certified financial planners themselves, owing to the ease with which the skills from one field transfer to another. People who are both certified public accountants and financial planners are often active at tax time when the former specialization is more prominently needed.
There are benefits and drawbacks to all-in-one personnel. Hiring one particularly competent person may be serendipitous for some individuals, allowing them to cut back on the costs of maintaining a financial team. Likewise, a single person handling everything may not be able to perform competently in all disciplines, leading to minor slip-ups that could add up over time.
A certified public accountant, Lewis Daidone works as a consultant for BlackRock, specializing mainly in investment management. For more updates on accounting, subscribe to this blog.