Thinking of becoming an IFA

EdInvestor · 2 February 2006 at 8:11PM

hobbesandco wrote:

The work was really soul destroying in the end...

There seem to be quite a few people (not least the FSA) now saying that traditional IFAs might not be with us for much longer, for a number or reasons related to compliance and regulatory costs, retirement of many older IFAs and closure of their businesses, lack of capital for spending on business growth and investment, unsustainable business models which the insurance companies can't afford any more etc, etc.

Are you sure you wouldn't go through the training period and simply end up back where you started in a bank?

Deemy · 2 February 2006 at 9:34PM

Yhe, probably better off doing something like ACCA or CIMA more work but worth a hell of a lot more !

dunstonh · 2 February 2006 at 9:45PM

Are you sure you wouldn't go through the training period and simply end up back where you started in a bank?

I know that was a question aimed at hobbesandco but I will respond from my point of view and say NEVER. Although I can say that from a standpoint that I am not reliant on up front commissions. If there was an instant change to fees tomorrow I would survive with no problem. I wouldn't want to be a start up business at that time though on a small scale. It would slowly kill off the local IFA. Which would be a shame as the local IFA is generally more compliant and gives better advice at lower cost to the consumer than the salesforces. The FSA seems to want to concentrate on what is easier for it to manage rather than what is best for the consumer. Only hope is that Conservatives get into power next time and go through with their comments on reducing the powers of the FSA. Even though Tony Blair has said similar, there is little chance of him doing anything to change it whilst Mr Gordon "I love red tape" Brown is around.

Cook_County · 2 February 2006 at 11:46PM

And my understanding was slightly different - I had thought that IFAs were going out of business because of severe lack of competition in the PI market leading to unaffordable but mandatory costs.

Not that you'd know thiis from reading MM and IA each week where job ads are still filling up several pages!

dunstonh · 3 February 2006 at 10:21AM

And my understanding was slightly different - I had thought that IFAs were going out of business because of severe lack of competition in the PI market leading to unaffordable but mandatory costs.

PI costs have eased back a bit in the last year. Mine is due in May. There is no indication that any increase is expected.

It certainly is a cost to consider. If you take the FSA/FSCS levies and the PI cover, you are looking at around £7000 a year for a single advisor owned business.

EdInvestor · 3 February 2006 at 12:25PM

THe FSCS levy has just gone up by c.25% I believe due to a hurge surge in, you've guessed it, endowment complaints.

Dips · 8 June 2007 at 5:28PM

I've got to do FP1, 2 and 3 sometime soon. I've got the text book for FP2 at the moment. Would it help to do FP1 before I do FP2? I'm thinking I might do FP2 in the first week of July and do FP1 at the end of July.

Any thoughts?

chickencow · 9 June 2007 at 4:26PM

I'm aiming to do the exact same thing as the OP - I'm currently working for Friends Provident who kindly pay for my revision material and exam fees (typically £150 per unit) for the Certificate in Financial Planning (CFP) after which I am aiming to go for the Diploma in Financial Planning. Also, the advantage of doing it through my employer is that the technical consultants periodically run revision seminars that you can attend in addition to them providing past papers etc.

The old FPC was criticised as the investment part was not substantial enough so the new CFP differs from the old FPC in that there are now 5 rather than 3 exams. If you currently have the old style FPC, you would need to sit CF2 to get the new qualification.

As for doing the exams in 12 months - this is certainly possible and is actually the target I am aiming for. For units 1,2 and 5 they reckon you need to do about 70 hours revision and about 40 for 3 and 4. I have done my CF1, am sitting my CF2 very shortly and then I am going to try and do CF3 and CF4 together.

The exams are multiple choice (with the exception of CF5) and are now done online at various exam centres. Because the exams are done online, there are now a lot more testing centres and the exams are much more regular (in Manchester there are about 3 per week!) so you can sit the exam when you feel ready, rather than on a set date at 3 month intervals.

It's definitely best to do CF1 before CF2 as the latter builds on the knowledge gleaned from the former. The new units are as follows (recommended revision times in brackets):

CF1 - UK Financial Services, Regulations & Ethics (60 hrs)
CF2 - Investment & Risk (70 hrs)
CF3 - Financial Protection (40hrs)
CF4 - Retirement Planning (40hrs)
CF5 - Integrated Financial Planning (70hrs)

Hope this helps a little!

CC

Brum_Man · 9 June 2007 at 9:00PM

I've just completed Certificate in Financial Planning and I did them in the following order, CF1, followed by CF3 & CF4 then I did CF2 followed by CF5.

It didn't hinder me at all doing them out of sequence as they don't really build on each other at all, and certainly CF1 has no bearing on the others as far as I could tell! I found CF1 to be the most boring by far as it is really dry just reading about regulation as you can't really relate it to anything that you would have an interest in! The only one I would say leave until last is CF5 as you have to have the knowledge from all of them to be able to do it.

I think 12 months is a very realistic time frame to do them in, even more so now the exams for 1-4 are computerised and you can do them much more often. I did them when you could only sit them every 3 months and it as a pain in the bum!

I plan on starting Diploma level in October.

stphnstevey · 9 June 2007 at 9:52PM

Just out of interest, how well paid is a Financial Adviser (typical salries with X amount of experience)?

Thinking of becoming an IFA

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