Difference Between Financial Planning and Accounting

Training for financial planners has additional requirements not expected of accountants in the form of ASIC RG146/  PS146 compliance. Both accountants and financial planners are expected by their respective industries, professional bodies and clients to have underlying educational requirements however this is only a legal necessity for financial planners and not accountants in the majority of their work environment. Financial planners are regulated by ASIC in their requirement for them to undertake RG146 or PS146 courses if they want to operate as authorised representatives for licence holders. Accountants excluding auditors and taxation agents are not legally required to be educated as regulation comes through the Corporations law which requires any accountant dealing with companies to use the Australian Accounting Standard Board’s accounting standards which are in fact the international accounting standards.

The difference comes in the way regulation occurs, financial planners’ education is regulated while the compliance requirement of following legally enforced standards is the regulation tool used by ASIC to control accountants. It is legally possible for an accountant to have never undertaken an accounting course and still be in charge of accounting at a large corporation.

A financial adviser alternatively needs to be ASIC compliant and as a minimum must do RG146 / PS146 courses. The majority of providers offer this qualification in the form of the Diploma of Financial Services (Financial Planning) which ordinarily would give full ASIC RG146 / PS146 compliance. Typically the various ASIC compliance requirements are contained in these courses including, securities, managed investments, derivatives, insurance advice and insurance broking. The Advanced Diploma contains a greater focus on taxation, estate planning and financial plan constructions.

Accounting courses are broken into areas such as financial accounting, management accounting, auditing and taxation. Whilst as mentioned an accountant in charge of a large organisation can legally have no accounting training, the industry is mature enough that this would be unlikely to happen. Often professional qualifications are a requirement to gain senior accounting roles.

As the financial planning industry matures it should be expected that the Advance Diploma of Financial Services (Financial Planning) will become the industry requirement for financial planners wishing to progress in their career. Industry providers now have Recognition of Prior Learning options available which reduces the need for traditional study methods. Accountants typically need a degree or even a Masters to be recognised as educational sufficient to apply their craft even though as mentioned this is not actually a legal requirement. There are many educational opportunities for financial planners after they finish their RG146/RG146 complaint courses. They can also focus on specialist areas such as taxation, self managed superannuation funds and foreign exchange.



Source by Lenny Hayes

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