What is the Difference Between Insurance Agent, Broker and Financial Planner?

How is an Insurance agent or Wealth/Portfolio Manager different than a Financial planner ?

Do You Know that Insurance Agent, Broker and a Financial Planner all are the different things. I mean different kind of professionals. Bt unfortunately, people don’t know this. And the Insurance Agents call themselves a Financial Planner. In fact, in today’s world almost everyone call himself a Financial Planner and claim you to manage your money. In this Article, I will tell you the difference between all of these.

Agent

An agent is a person who has entered into an 'agency contract' with an insurance company for the purpose of selling insurance for that company. An agent is not an employee of the insurance company, but rather an independent contractor. The agent, unlike a broker, has the authority to bind coverage (legally obligate the insurance company to provide coverage according to the terms and conditions as bound).

Thus, the main job of the agent is to sell the financial products of the Insurance Company with which it has tied up.

Broker

A broker is a person or firm that has permission to seek insurance quotations for an insured (client) or prospective client. A broker is not an insurance company employee. As a representative for the insured, brokers will approach several insurance companies in an attempt provide quotations and coverage to adequately insure the client's exposures.

Thus, the Broker is someone who has tied up with several insurance companies so that he will suggest you the Insurance products according to your financial needs. In other words, a Broker is unbiased.

Financial Planner

A Certified Financial Planner is one which has a degree of CFP (Certified Financial Planning) and it authorized by government to do so. A Financial Planner will help you to manage all of your money related issues such as debt management, long term investing, Tax Planning, Insurance Planning and many others.

Thus, all of the above are the different things. You Should take advice only from the Broker or the Financial Planner and not from the Agents.