Compared to CPAs who work to lower your tax liability, financial planners focus more on strategies to increase your overall wealth. This usually includes investing in the stock market, saving with a money market account or retirement planning.
Trust is essential when choosing a financial advisor because they handle such important and personal information. A CPA, or Certified Public Accountant, can be that person for you. They advise on taxes and accounting to help individuals, businesses, etc. reach their targets.
Many CPAs, however, extend their services to include financial planning and advisory activities. Financial planning and advisory services may be provided by CPAs who act as financial planners. Estate planning, retirement planning, risk management, and investments are all possible areas of expertise for CPAs who act as financial planners.
CPAs are allowed to give their clients some investment information without having to register, however they cannot go too in-depth. The main concern is whether or not the CPA's advice falls under the term of “investment adviser” as seen in the Investment Advisers Act of 1940.
A CPA understands the tax ramifications of your investments, costs, and other factors that influence your tax return. Your financial advisor is informed on taxes and can assist you with the tax implications of your investment decisions, but he or she will most likely pass on any major tax queries to your accountant.
A CPA is more qualified to perform accounting tasks than an accountant and has been recognized by the government as a competent and knowledgeable specialist in the area. Individuals who have earned a CPA degree are educated in generally accepted accounting standards and best practices (including online technologies).
Accountants also assist in asset protection, estate planning, residential property rentals, company formation, estate planning, and business start-up services as well as fringe benefits tax and capital gains tax administration.
The AICPA Professional Code of Conduct contains standards resembling those in a fiduciary relationship--objectivity, integrity, no conflicts of interest and truthfulness. Even though an accountant is not legally known as a fiduciary to clients, these ethical guidelines come close.