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CPA Questions: Is a CPA and a Financial Advisor the Same Thing?

Do you want to make sure that you’re able to hang onto as much of your money as you can? Then you’re going to need to get into the habit of working with some of the different financial professionals that are out there early and often.

More specifically, you’re going to need to have both a CPA and a financial advisor on your side. And you’ll need to realize that a CPA and a financial advisor are not the same thing.

There are lots of people who are under the impression that CPAs and financial advisors tackle the same tasks. But in reality, they actually focus on two very different aspects of your finances. It’s why you should hire both the best CPAs and the best financial advisors to help you out over time.

Today, we’re going to break down some of the differences that exist between CPAs and financial advisors. It’ll help you to decide when you should hire each of these two options.

Learn more about what sets CPAs and financial advisors apart below.

What Is a CPA?

A CPA is a Certified Public Accountant. They specialize in lending a hand to those who need assistance with their taxes.

At this time, there are more than 650,000 CPAs operating throughout the country. Some of them work independently and help people like you with their taxes. Others of them work for large corporations and provide them with everything that they need to satisfy their tax obligations.

Becoming a CPA is not easy. In order for someone to start a career as a CPA, they first have to earn a bachelor’s degree in accounting. From there, they need to begin to earn real-life experience in the accounting field, and they also need to pass the CPA exam. It’s a notoriously difficult exam that a large percentage of people don’t pass the first time they take it.

But this is all for the best. It prepares people to work as CPAs and to handle everything that the various tax codes will throw at them.

What Can a CPA Do for You?

Doing your taxes every April is probably one of the most stressful things that you have to do all year. One recent report found that about one-third of Americans stress out about their taxes to a ridiculously high degree.

If you’re someone who is always stressing out about your taxes, hiring a CPA might work wonders for you. A CPA will be able to:

  • Help you file your tax returns in the right way
  • Allow you to collect the biggest tax return possible
  • Reduce the chances of the Internal Revenue Service auditing you

Bottom line: You’re going to feel way better about filing your tax returns in April when you have a great CPA in your corner. They’ll be able to walk you through the process of filing your taxes so that everything gets done correctly in the end.

When Should You Hire a CPA?

There are some people who won’t really need to hire a CPA at any point in their lives. If your tax returns tend to be very simple and straightforward, you should be able to get away with not hiring a CPA to work on them for you.

But if your tax returns are always very complicated or if you feel like you’re not getting the biggest returns possible each year, it’s going to be a different story. In these kinds of cases, you should seriously consider bringing a CPA on board to help you.

Even if you only hire a CPA for a single year to assist you with your taxes, it’ll give you a good indication of how they might be able to help you. You’ll get to enjoy a completely different experience than you do during other years when you hire a CPA to do your taxes for you.

Do You Need to Hire a CPA to Achieve Financial Success?

As we just alluded to a moment ago, there are plenty of people who aren’t going to benefit from hiring a CPA all that much. If your tax returns are easy to do and you feel like you’re getting returns that are accurate, you might be better off not working with a CPA and saving yourself some money.

But if you’re leaving money on the table almost every year while doing your taxes, you could benefit from working with a CPA in a big way. They’re literally going to put more money into your pockets each and every year and make you look like a genius for deciding to hire them.

A CPA might also be able to make suggestions as far as what you can do to get even larger tax returns as you move forward. It’s why it might make all the sense in the world to hire a CPA as soon as possible.

Which CPA Should You Hire?

Do you feel as though hiring a CPA would help you in a financial sense? Then you should go ahead and do it now.

But you shouldn’t hire just any old CPA to assist you with your taxes. Instead, you should Google “CPA near me” or even “CPA financial advisor” to see what your options are. And you should hire a CPA who has the following qualities:

  • They should be very experienced
  • They should have an excellent reputation among those in your community
  • They should be updated on the latest tax codes
  • They should have a friendly demeanor
  • They should offer affordable prices on their services

Don’t be afraid to do some digging around on the different CPAs in your area. It’ll shine a spotlight on the CPAs who definitely deserve your business.

What Is a Financial Advisor?

Now that you know what a CPA is, what a CPA does, and when you should consider hiring a CPA, let’s talk a little bit about financial advisors. A financial advisor is not the same thing as a CPA—but they might also play a key role in your financial success.

Financial advisors specialize in helping people to take the money that they have and get it to grow into more money over time. From the second that you start working with a financial advisor, they’ll be committed to providing you with financial strategies that will help to shore up your financial future.

As of right now, there are well over 200,000 financial advisors working throughout the U.S. To become a financial advisor, a person must earn a bachelor’s degree in finance before gaining real-world experience as an intern and securing the right certifications to work in the financial field.

It’s not quite as difficult to become a financial advisor as it is to become a CPA. But it’s still hard to break into the field. Financial advisors need to know about everything from the stock market to estate planning to achieve success within their industry.

What Can a Financial Advisor Do for You?

Sadly, recent surveys have shown that about 75% of people aren’t working with financial advisors in an effort to reach the retirement goals that they’ve set for themselves. Because of this, many of them aren’t getting anywhere close to meeting these goals once they reach their 60s and 70s.

If you fall into this category right now, you should learn from these people’s mistakes. It would be worth working with a financial advisor to improve your chances of meeting all of the financial goals that you have for yourself.

A financial advisor can show you:

  • How to come up with a budget for your income and expenses
  • What you should do with the money that you want to save
  • How much money you should save to reach your long-term financial goals
  • Which approaches you should take to investing the money that you save
  • How to respond to financial emergencies that would otherwise catch you completely off-guard

Managing your money on your own can be a big challenge. A financial advisor can step in and show you how to manage your money more effectively from now on.

When Should You Hire a Financial Advisor?

There is no law saying that you have to hire a financial advisor to help you manage your money. It’s why there are millions of Americans out there right now trying to manage their money themselves without any assistance from professionals.

But the truth of the matter is that you should really think about hiring a financial advisor from the moment that you first launch your career. They’ll help you put good spending and saving habits into place so that you’re able to make the most of your money over time.

That being said, it’s really never too late to hire a financial advisor to represent you. Even if you don’t get around to hiring one until you’re in your 30s, 40, 50, or even 60s, they should be able to assist you in making your money stretch further at any age.

Do You Need to Hire a Financial Advisor to Achieve Financial Success?

If you’re someone who has always been very good with money, you might not have to hire a financial advisor to achieve the financial success that you crave. You can technically learn how to invest your money on your own and go about doing it in that way.

But there is a reason why about 25% of Americans don’t have any money saved up for retirement. It’s because saving up for retirement is difficult to do yourself! When you don’t have anyone holding you accountable, it’ll be so easy to stop setting money aside for retirement.

If you don’t have the discipline to say “NO!” to yourself when you’re about to buy something that you shouldn’t or if you don’t know how to invest your money to get the best possible returns, you should work with a financial advisor. They’ll take care of these things for you and provide you with a lot more peace of mind than you have now.

Which Financial Advisor Should You Hire?

While it would be smart to hire a financial advisor, that doesn’t mean that you should feel free to hire whichever one looks best when you Google “financial advisor near me.” You might be asking for trouble if you take this approach to choosing a financial advisor.

Rather than going that route, you should do the same thing that we recommended to you earlier when we talked about hiring a CPA. You should generate a list of your local options and see which financial advisor is the most qualified to help you out.

The financial advisor that you select should be very experienced in the financial field. They should also have lots of glowing reviews from the people they’ve worked with in the past. And above all else, they should have a proven track record that demonstrates that they know what they’re doing.

You’ll know that you’re in good hands when you find a financial advisor who checks each and every one of these boxes. You’ll feel confident when you begin working with them.

Hiring Both a CPA and a Financial Advisor Should Be a Part of Your Financial Plan

CPAs and financial advisors cross paths all the time since they both work in similar fields. It’s not uncommon at all for them to work side-by-side on behalf of their clients.

But as we’ve talked about here, CPAs and financial advisors do not do the same jobs. A CPA and a financial advisor will perform jobs that are very different from one another day in and day out.

You should hire both a CPA and a financial advisor to work for you. When they’re a part of your financial plan, your financial future will be stronger than ever.

Get more useful financial tips and tricks by browsing through the other articles on our blog.

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