Financial planner vs investment manager: what is the difference?
Investment management is about the portfolio. Financial planning starts with what the money is supposed to achieve.
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What does a financial planner focus on?
Financial planning can bring together goals, retirement, cashflow, pensions, investments, protection and other parts of a household's finances. Regulated recommendations depend on the adviser's permissions.
What does an investment manager focus on?
Investment management focuses more directly on constructing and managing portfolios. Some firms combine investment management with financial planning, while others separate the services.
Know which service each fee pays for
A client can sometimes pay an adviser fee, an investment-management fee, platform charges and underlying fund costs. Ask for the total structure in pounds and percentages.
Start with the problem
If you need help deciding whether retirement is affordable, that is a planning question before it is an investment question. If the plan is already clear and the need is portfolio management, investment capability may carry more weight.
Separate deciding the purpose from managing the assets
Financial planning connects resources with goals, spending, income and constraints. Investment management concerns the portfolio and the authority to make investment decisions. A firm may provide both, but the contract should identify the work and responsibility at each layer.
Ask who determines the amount to invest, the time horizon and the need for access. Then ask who selects investments, changes holdings and reports performance. A portfolio can be managed competently while the household plan still needs attention.
If a discretionary manager is involved, understand what decisions it can make without asking you each time. The mandate should be consistent with the plan and the information supplied.
Test the handover between the two services
An illustrative retiree might have a planner assessing income needs and an investment manager implementing an agreed portfolio. If spending rises materially, someone needs to reassess the plan and communicate any changed requirements. It should not be assumed that a portfolio statement triggers that wider review automatically.
Ask how risk, withdrawals and changes in circumstances are communicated. Identify the contact for planning questions and the contact for portfolio administration. If both sit within one group, separate responsibilities can still exist.
Check how disagreements or limitations are handled. A manager's investment approach should not silently redefine the client's spending goals or capacity for loss.
Add the fees without double-counting
Request the planning or advice charge, investment-management charge, platform or custody charge and underlying investment costs. Ask which amounts are already included in a combined figure.
Confirm whether you can retain one service while changing another and what records you receive on exit. This helps you assess flexibility as well as cost.
The appropriate combination depends on the decisions you need help with and those you wish to delegate. A title such as wealth manager does not settle which of these jobs the service actually performs.
Sources and further reading
MoneyHelper - Choosing a financial adviser ↗
