Thinking of becoming an IFA

hobbesandco · 30 January 2006 at 8:36PM

Not sure if this was the best board to use but I thought a lot of IFAs go on here so it was worth a try.

Anyways, I am thinking of jacking my career in IT and working towards becoming an IFA. This isn't a spontaneous, whirlwind decision. I have been thinking of it for some time and I do read finance websites, magazines and books on a regular basis. I just figure why not get paid for something I do anyways? I know doing it professionally is quite a big step but I think it may be something I would enjoy.

I have looked at the FCP (or CFP) website to have a look at the certification. Does anyone have any advice? Is this a certification and career worth pursuing? Is it an easy industry to enter? Are there any jobs in the Midlands? Is it easy joining an IFA firm as opposed to banks?

Sorry about the questions but I would like to do as much research as I can before changing career. And I'm happy to have this post moved if it belongs in a better place.

Thankyou

dunstonh · 30 January 2006 at 9:58PM

Is it an easy industry to enter?

Not as much as it used to be. Going straight to IFA is virtually unheard of nowadays. You would be looking at a path that would take a couple of years to get there.

Is it easy joining an IFA firm as opposed to banks?

Without qualifications or experience at any level, you are unlikely to get in with an IFA firm. Even if you did, it would be at mortgage level or general insurance level.

General insurance and mortgage exams are not that hard and a bit of self teaching could get you those exams and it would make it easier for you to get a placement with an IFA firm. However, they would be unlikely to fund your training and qualifications to the required level. You would also have to prove competent at the GB and mortgage levels first.

Banks are far easier in that respect plus there is less cost on you. Even there you could still do with 2 years experience with a bank as a tied agent before going IFA. You don't learn the job by passing exams. That just allows you sit in front of clients. After you pass the exams, thats when the learning begins. Best you make your mistakes and learn the job in front of bank customers. It doesn't cost you anything, a future complaint won't be a problem for you and most bank advisors are low knowledge and skilled so you won't feel out of place. Just don't let them brainwash you.

http://www.cii.co.uk/cii.aspx is the website for the qualifications needed.

I would say go with a bank for the exams. Do your 2-3 years with them. After that, if you realise how crap a bank really is, then you should do well as an IFA. If you think that banks are better than IFAs at that point, you have been brainwashed and turned into a salesman and entered a comfort zone that would see it hard for you to survive as an IFA.

Starting the job with an IFA firm would be the harder route plus you wouldnt get the exams passed as quickly as a bank.

hobbesandco · 30 January 2006 at 11:09PM

Thanks for your reply dunstonh. What I am thinking of doing is taking about 6 months to a year to take the exams. I notice on the cii website that there's a Personal Finance society with workshops and conferences. Is it worth joining in terms of networking? I'm thinking if I can meet people in the industry when I have passed 1 or 2 FCP exams should enable me to get my foot in the door.

dunstonh · 30 January 2006 at 11:43PM

I'm not up on the new qualifications required. The old one required FPC 1 before you could see protection clients and FPC2 before you could see investment clients. You then had to pass FPC3 within a defined timescale. It was a long time back but I think it was 12 months. The CII website should confirm that.

If you can get 1 & 2 (or the new equiv) then you should find an IFA firm is more willing to consider you. However, it would almost certainly be only on mortgage and protection terms to start with.

Remember that the minute you are an advisor, you have a £2000 a year levy to pay and there will be PI costs. Another 1k average there per year. Either these are going to be passed to you in some form or you need to go down the tied route. Trying to run before you can walk will be costly. Without a client bank and experience, you are not going to find many IFA companies, i would think, that would look at you in a straight to IFA role. Not only that, who would pay the supervisory costs? You are looking at joint appointments with a supervisor for a number of weeks. If the employer thinks it's worthwhile, they may do it. Otherwise you may find yourself having to do it in addition to another role.

Don't let me put you off. It's just that straight to IFA is going to be very hard and unrealistic. It could also be very risky for you. Did you know that a self employed IFA has a personal lifetime financial liability for the advice given? A tied agent doesn't.

Titan · 31 January 2006 at 11:04PM

I would think it is very optimistic to get full IFA qualification in 6-12 months, the exams are every 3 months, and there are more than 2 exams to get there... they just changed it all and now there are all sorts of FP this and FP that!

I'm lucky that my employer pays part of my exams, well, only the FP1 and FA2 exam, but I guess it makes sense as we only do SIPPs and WRAPs... pension stuff all (or almost all) of it.

Not wanting to burst your bubble, but just thought I'd let you know how the exams work

Titan

hobbesandco · 1 February 2006 at 8:42PM

I know the exams are once every 3 months but are the FP exams easy and could you do two exams in one session?

Also, if I chose to work in a bank would the sales targets be realistic or would I be flogging myself trying to sell their products to everyone?

dunstonh · 1 February 2006 at 9:42PM

know the exams are once every 3 months but are the FP exams easy and could you do two exams in one session?

You would be looking at 2 weeks solid 6-7 hours a day for two weeks to pass FPC1 and FPC2 (or the new version). FPC3 is a lot harder than these and you are looking at 6-12 months ideally. Any quicker than that and you risk losing a lot of the knowledge or only know the answers but not the reasoning behind them.

Also, if I chose to work in a bank would the sales targets be realistic or would I be flogging myself trying to sell their products to everyone?

From my experience, it depends on the branch you get. Good branch and you are laughing. Bad branch and you are doomed before you start. It is a sales evironment and remuneration and your job are dependent on sales. Different banks allow their advisors to have different levels of freedom. Even within the same banks, you get different levels. I wouldnt go back to a bank ever. The environment is sales sales sales, the products pretty poor and very expensive and the clients and you are a more of a salesman than an advisor. All that being said, they will give you free training, usually very good training to be fair and you come out the other end with an experience of banking which will remind you how much better being an IFA actually is.

hobbesandco · 1 February 2006 at 9:50PM

Is FPC3 the one about financial protection? FPC1 should be easy. It's about regulation and ethics (ie. there are none - just kidding!)

As for banks (and you don't need to mention names) how would I go about finding which ones were good and which ones were a joke. The reason I'm asking is because I used to work for a bank selling PPI and although we weren't really selling particularly hard you could tell it was getting that way. The work was really soul destroying in the end...My one big concern is that if I do find work in a bank, after 2 years I could be an expert on their products but not particularly on how to become a good IFA. Would I be any closer to becoming an IFA?

dunstonh · 2 February 2006 at 12:03AM

FPC1 (protection) and 2 (basic investment) were multiple choice. FPC3 is case studies and written answers. My FPC case studies were on inheritance tax and pension transfers. A bit !!!!ty really as I was with a bank at the time and they didnt do either of those as tied agents and didnt train us on it. Managed to get a pass though.

My one big concern is that if I do find work in a bank, after 2 years I could be an expert on their products but not particularly on how to become a good IFA. Would I be any closer to becoming an IFA?

A heck of a lot closer than trying to do it directly yourself. I did 4 years of general insurance brokerage and 6 years of tied advisor (with a bank) before going IFA.

It takes years to learn what to do correctly. So, as you say you want to be a good IFA, rather than just an IFA, taking it in stages makes much more sense. Every week you learn new information if you want to. You would't make a good IFA if you do it too quickly.

K9cuddles · 2 February 2006 at 12:51AM

Well I'm sitting my CF1 and FA1 in april! All paid by employee!!! Plan to do CF2 and CF3 in July, CF4 and CF5 in Oct and maybe CF6 & CF& in Jan 07.

If you need a study partner let me know!!! How are you funding it all? I'm sure it's a case of needing experience once you pass though!!! I'm not planning to become a IFA though.. just want the knowledge under my belt!!!

Deemy · 2 February 2006 at 3:57AM

Yeh if your employers payign then do them....

Ibe toyed with the idea over several years but abandoned for now... since there are far, far too many IT certs to get through :mad: TOOOO MANY !

Thinking of becoming an IFA

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