How to become a financial advisor

Hi

It's a great profession, but not an easy ride to get there. You're right in that you do have to gain the Certificate in Financial Planning, which consists of five exams and could be passed in six months if you put in the work. From 1st January 2013 though, Financial Advisers also must have attained the Diploma in Financial Planning which is a further four exams and arguably another 18 months to two years work. Total cost to get these nine exams? Allow £2,000 easily.

You would have to become registered with the FSA and you would have to have professional indemnity insurance. There are also annual levies for the FSA, the Financial Services Compensation Scheme and the Financial Ombudsman Service and these can run into thousands each year. It is also worth knowing that the compliance regime for being an adviser is pretty onerous. By that I mean if you arrange a policy for someone the paperwork that has to go with it is vast. Doing this, effectively in your spare time, is a big ask.

Assuming you wanted to be an IFA, an Independent Financial Adviser, you would also have to have a grasp of all the products available from the whole market, which ususally means investing in expensive sourcing software.

If you get chance, Google 'Retail Distribution Review' (RDR) which is a change in legislation coming in from 2013 which will change financial advice forever. Some estimates say that 20-30% of the advisers will leave the profession as a result of these changes. That of course means there's a great opportunity for those of us left behind!

My advice to you: if you really want to do this, join a bank or insurance company and cut your teeth there for a couple of years. They'll teach you how to do the paperwork and they'll take responsibility for your advice while you're learning. Then you can make the jump into being an IFA, but even then, as a one man band, you could consider joining a network, which take responsibility for your advice and provide various services like compliance and training, all for a fee of course.

Are you planning to be sefl-employed doing this? If so, you should know that the liability for your advice will stay with you forever meaning that if someone complains twenty years after you gave them advice, you could be liable to compensate the client. You could set up as a limited company which would mitigate this a bit, but either way, you may need to hold 'run-off' indemnity insureance for many years after y ou stop advising.

One final thing, the RDR abolishes commission, which means the days of high commissions for arranging policies have gone (which is a good thing, by the way). In its place comes 'Adviser Charging' where the adviser will have to agree the fee for the work up front with the client, a difficult thing to do when you are a newbie.

i hope I haven't put you off, but it's important you go into this with your eyes open. Being a Financial Adviser is a privilege. You have unprecedented access into people's lives and a fiduciary responsibility to look after their affairs. That's why the FSA is finally tidying up the industry and getting rid of the underqualified lightweights. Those that remain should have shown they have the committment to do the job right. Its a great profession - come and join us! But you'll have to put the work in, and all the requirements set out above mean that doing it part time is going to be really, really difficult.

Cheers!

I have just started to look into becoming a financial adviser and hopefully one day an independent financial adviser im only 20 and just looking at starting my first set of financial qualifications. I am incredibly enthusiastic and would enjoy to have a job that requires such experience, intelligence and responsibillity.

Does anyone have any advice as to how I can get to my goal of an IFA through some sort of action plan, I have an idea myself but would like to know if there are any things that I should look out for, for example what exams should I first take and in what order?

What Jobs should I be going for in order for me to recieve the experience I need?

any advice would be great.

Cheers

Hi

I am currently a Teacher. i would like to change my carrer path to working as an Financial Advisor

I know its a completely different paths but I am tired of teaching and would like to do something different.

Where is the best place to start???Please help!

I am looking to get back into the industry after a break of a few years. I know I need to do some exams as I only have fpc3. What would be my best way of achieving this & what exams would be my best route. Also what route would be best to get back into the industry employment wise.
Also a friend of mine would like to change her career path to become a FA but she had some minor debt problems with her bank in the past. They were not ccjs it was an overdraft that got frozen & she paid it back gradually.

Many thanks

No bad credit or even bankruptcy does not stop you being an IFA I know as I have been bankrupt. The FSA keep an eye on you more closely, howev the companies themselves will have issues.

to start as an ifa on your own and not as part of a network

1. capital adequacy £10,000 in the bank doing nothing

2. Professional indemnity insurance circa £3,000 upwards

3. Circa £2000 upwards per annum in regulatory fees

Coming in to the industry as a know nothing you will find little work best career path to follow is to get the first couple of exams yourself and gain work as a trainee paraplanner in a firm.

This will let you gain experience knowledge and customer facing skills as well as a grasp of the industry.

to succeed as an IFA you will need to be able to understand current affairs and how they relate to your client bank.

As to age I started in the industry at 24 and I am now 37, any sensible client will not equate age with lack of knowledge, experience is acquired knowledge is gained and if you can apply that knowledge in client meetings then the age issue is quickly forgotten