Understanding the Differences Between an Accountant vs. Financial Planner in Lancaster, OH

July 01st @ 11:08 am

Finding the right financial assistance is nothing to take lightly, but how do you know which type of expert is right for you? We discuss key differences here!

Taxes, retirement planning, and budgeting can be challenging and time-consuming for anyone. Finding the right personal finance assistance is nothing to take lightly, but how do you know which type of expert is right for you? As you begin looking into and comparing accountants vs. financial planners in Lancaster, OH, think about these crucial factors.

Defining Accountants and Financial Planners

Although similar, accountants and financial planners have some key differences. Among other duties, accountants will audit your financial situation, prepare your taxes, and consult your business. In contrast, financial planners assist with budgeting, investing, and building wealth. Additionally, some financial planners act as fiduciaries, which comes with its perks.

When You Need an Accountant

Accountants are most helpful when it comes to managing your business. Taxes can be challenging when you need to juggle both individual and business forms. Your accountant should help you understand tax laws and how they affect you and your business. They’re also able to recommend strategies for business growth, steps to structuring your business, and break down expenses.

Besides business owners, you may also need an accountant if you make more than $200,000 annually. Tax laws get more difficult as your tax bracket increases causing you to need more tax preparation.

You may also consider an accountant if you own multiple rental properties or if you anticipate receiving substantial capital gains.

There are other particular circumstances in which you may want to consult an accountant, such as:

  • If you are adopting a child,
  • If you are buying property,
  • Or if you own several large investments.

When You Need a Financial Planner

As mentioned previously, having a financial planner act as your fiduciary works to your advantage as they are legally obligated to act in your best interest. Regardless of their fiduciary status, an excellent financial planner will work to get you out of debt before encouraging you to make investments.

Financial planners are particularly beneficial for working towards savings goals or budgeting to get out of debt. Both tasks can be daunting alone but are a easier to accomplish with help from an expert.

Wealth management is another area of expertise for financial planners to help you manage debt, increase your cash flow, provide financial advice, and create your financial plan. Here’s what else they can tackle:

Hiring a financial planner typically goes one of two ways: choosing a flat fee or a commission-based payment. Flat fees are used for structured financial planning services, while commission-based payments are used for unique investment guidance or combining the two.

When You Need Both

There are circumstances when you need both an accountant and a financial planner working together for your financial security. While both types of financial professionals work on tax preparation, an accountant can often save you the most money when tax season comes around.

Finding an Accountant or Financial Planner in Lancaster, OH

You should be able to trust your accountant or financial planner. One way to do that is to get a referral from a family member or friend. However, you can also search locally to find a qualified financial professional.

Regardless of how you start your search, it is always in your best interest to inquire about their qualifications. Are they certified? What experience do they have, and what is their area of expertise? Do they hold up to the certified financial planner board of standards?

Whether you hire an accountant or a financial planner, they should help you understand all risks involved and explain issues that pertain to you in-depth. Consider reaching out to the professionals at Royal Oak Financial Group for a personal approach that takes your circumstances and goals into account.


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