What is the Difference Between a Financial Advisor and an Accountant?

If you’re looking for someone to help with your business finances, you may be wondering whether you are best looking for a chartered accountant or a financial advisor.

From the outside, they may appear to offer very similar services, but there are big legal differences that apply to both, that could help you make that all important final decision. Which one is best for you and your situation, all rely on the level of service you need when it comes to your business finances and what your overall objective is from hiring someone to help.

We take a closer look at the differences between a financial advisor and an accountant below, to help you understand the different job roles of each.  


What does an accountant do?

There are a few different roles within accountancy and many will be covered within one accountancy service, through the work of various accountants. Bigger accountancy firms will often have different teams to deal with each area of accountancy, ensuring your requirements are fully covered.

These areas consist of:


  • Bookkeeping – Maintaining a company’s financial records, including, but not limited to payroll, accounts payable, accounts receivable and balance sheets. This is something that forms the foundations of any great accountancy service.

  • Tax preparation – Ensuring that all relevant and necessary tax forms, self-assessment and any other tax you or your company needs to pay, is correctly processed and managed.  

  • Auditing – Auditing can be very helpful and a great security measure, to ensure you are not overspending and also to ensure all company money is being used in an upstanding way.



What does a financial advisor do?

A financial advisor is there to guide you, rather than help you manage or organise your finances.

A financial advisor is there to help you understand the best investment options for you and your business. If you have big financial goals, whether that is giving your children private education or saving up for your retirement, a financial advisor can help you to understand the best way to handle your finances in order to reach that goal.

Businesses will often hire a financial advisor if they are worried about cash flow and are looking for a way to get their finances back on track, or if they are looking to expand and want to form a plan to do just that.

Their main job role is to help you know where and when to invest your money.


Can accountants give financial advice?

Although accountants can offer financial advice based on your current accounts payable and receivable, they are not at liberty to tell you how to spend or invest your money. They can only make you aware of areas that could be a potential risk in the future, or areas where you have the flexibility to place more focus.

When it comes to any kind of advice around investing your money, your accountant is unable to help.


When do you need an accountant?

Although accounts can be done internally within your business, it is always best to have an external accountant to hand, who can offer a clearer view of your business finances.

Having an accountant right from the very beginning of your business, will make things a lot easier and offer more security in the long run. You will greatly decrease the risk of any unfortunate tax or financial issues cropping up further down the line.

If you currently have an accountant, but you are not 100% confident in the service they are providing, it may be worth switching to a new chartered accountant. Ensuring you have the right accountant for you and your business is crucial when it comes to healthy business finances.

Get in touch with us if you’d like to find out even more about our accountancy services for established entrepreneurs and growth businesses!


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