The difference between a financial planner, mortgage broker and accountant

One of the hardest parts about finances is understanding who you need and when you need them to support you.

Commonly my new clients will ask me what the difference is between a financial planner and a mortgage broker or an accountant.

In this blog article, I’ll break down who they are and how they are different.

Mortgage Broker

A mortgage broker will assist you to get a loan. This is most commonly a home loan but mortgage brokers can also assist with car loans, personal loans and other things.

A mortgage broker usually won’t charge you a fee and will instead receive a commission from the bank they place your business with.

It’s common that people will think if they go direct to their bank instead of a mortgage broker, they will get a better rate, but this is rarely the case.

Whilst a mortgage broker can be great for understanding how much you can borrow (within the bank’s rules), their role is not to tell you whether you can afford to borrow this much.

Commonly I see people under the belief that the mortgage broker has assessed whether they can afford the loan. Whilst a bank has rules in place as to how much you can borrow, this is to protect the bank and not you.

If you default on the loan, the bank wants to know that they can sell your house and recoup their losses.

Accountant

An accountant can be a very broad role. Particularly for business owners, some accountants take on a role similar to a Chief Financial Officer and model out projections for the business.

Most accountants however and in particular, any accountant that works with employees usually is there to help you submit your tax return only.

Whilst they might give you some general tips on finances, it’s important to understand that this isn’t financial advice. They haven’t learned about your situation and goals and are not responsible if some of those tips put you in a bad position.

Financial Planner

A financial planner can’t assist you to get a loan.

They also can’t lodge a tax return for you.

Instead, a financial planner will help you to map out your goals and develop a financial plan to get there.

For example, you may be approaching retirement, looking to downsize your home and travel around Australia.

A financial planner would map out a spending plan for you and map out future costs. They would set out a plan about what to do with your money once you downsize the home and how much you’ll need to retire.

All of this will take into account your goals and where they aren’t possible, a financial planner will map out alternatives.

They will recommend and potentially set up a super fund, recommend investments, look at life and income protection insurance and help you to structure your finances in a tax efficient way.

Overview

This is just a general idea of what these three professions do and like all things, different people do different things and have different approaches.

If you’re ever unsure, feel free to ask the person what they are responsible for and what you’re responsible for. Whilst a lot of people may ‘dabble’ in other areas, it’s important to understand who is responsible for the advice they give you.