Can Accountants Give Financial Advice?

If you work with money, or you run a business, you may have encountered accountants and financial advisors or planners. In the financial industry, these two career paths are heavily involved in wealth management. You may have wondered whether your accountant is able to double up as a financial planner or advisor and provide you with financial advice.

In order to explain the answer to this question, the difference between an accountant and a financial advisor must first be explained.


Accountant vs Financial Advisor

Both reputable careers in finance, accounting, and financial planning or advising are two fairly different job roles. One works predominantly with business finances, and the other is largely concerned with the financial behavior of people as individuals.


An accountant is generally associated with a business or an individual with assets. Their job is to analyze and , taking into consideration any taxes, assets, revenue, and liability. They will ensure that all financial documents related to their clients are compliant with any laws and that they are accurate, they will prepare financial reports, tax returns and evaluate any financial operations their client may be involved with. An accountant will also conduct financial forecasting and risk analysis.

In order to work as an accountant, someone will have to have studied the right qualifications in order to pass exams and become a chartered accountant. In the UK, this consists of an AAT, ACCA, AIA, ICAEW, or CIMA. In the US, they will have had to study for a Master's Degree, and then studied for the CPA to become a Certified Public Accountant.

Financial advisors

A financial adviser or advisor's job is to provide their clients with expert advice on how to manage their money, considering their personal and financial life. The advisor will research the marketplace and recommend any appropriate services and products that suit their client's needs.

There are two types of financial advisor; independent and restricted. An independent financial advisor (IFA) researches and suggests all retail investments that suit their client, and can be unrestricted in their advice. Alternatively, a restricted advisor may only offer limited advice.

To work as a financial advisor, a person must have some basis of knowledge for the role. In the UK, they must have registered as ‘an approved person' by the Financial Conduct Authority. In the US, a person will need a Bachelor's Degree and then some kind of financial certification before they are considered a certified financial planner or advisor.

Do you need an advisor or an accountant?

If you've found yourself asking whether your accountant can provide financial advice, it might be worth seeing whether you could benefit from working with a financial planner or advisor alongside or instead of your accountant.

Whether you need both an advisor or an accountant depends on your circumstances and your income. If you are a small business, or you're launching a new business, then the likelihood is an accountant will do just fine and the help you need will be covered by the work they do.

However, if after a while you decide you'd like to invest some of your profit or expand your business into new areas – you will require the support of financial advisors or financial planners. They can use their expertise to do market research for you to see what is worth investing in and what isn't, providing you with detailed information on all of your options.

For smaller aspects of your finances, such as reducing costs, managing budgets, or ensuring taxes are paid to avoid any tax charges – an accountant will be able to provide you with these services. They keep an eye on your cash flow and will be able to look after your finances for you.

What can accountants do?

Accounting is a very hard job, and so whilst it may seem like they cannot help you directly, they will use their knowledge and skills to do all of your tax planning and to provide tax advice, they will also consistently be managing finances for you. This lets them analyze your business performance and ensure that your financial matters are always in order.

An accountant can provide financial advice to an extent, but not in the same way that financial advisors do. They cannot provide investment advice or tell you where to spend your money, however, they can advise you on expenditure and costs based on your current financial statements. They can also run risk assessments to see how much damage a decision might cause, and may choose to advise against it (so long as it is not an investment). They can also tell you when your budget is not working, and suggest ways to make your business reach any long term financial goals you may have.

An accountant is a huge asset to any business or company, and can really help with business strategies, managing debt, handling invoices, applying for , hiring, and making your finances make sense. They will work hard to support you from the sidelines whilst you work to keep the company going.

Can you have an accountant and a financial advisor?

You can absolutely have both an accountant and a financial planner or advisor. It is a great way to structure your wealth management.

If you feel like you need help when it comes to large investments, investment products, your retirement planning, stock markets, taking over new businesses, or purchasing property, then it may be worth looking into hiring a financial advisor.

Your accountant and financial advisor can work together to ensure that both of them can see the big picture and provide you and your company with the right services and help. Your accountant can keep an eye on what's in the bank, whilst your advisor can search and let you know about the new trend in the market. Between the group of you, you can work to achieve financial growth, and then you can trust them with your financial management and financial planning.


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