Thinking of becoming an IFA

JobSeeker_3

Hi all,

I'm considering a career change too. Having read the posts of this thread I'm wondering if I would be better studying for a mortgage advice certificate first before trying to progress to becoming an IFA. What would you advise?

Also I see a lot of posts relate to the CII courses and qualifications, is there any difference in studying for a CEFA or CEMAP qualification with ifslearnings.ac.uk ? I phoned the FSA and they said there is no difference in how these qualifications are recognised in industry, they contain the same material but may be structured differently.

How easy/difficult would it be for someone to gain a qualification and try and either find a job or get authorised and work self employed?



Thank you in advance.

JobSeeker

Lokolo

Sign up to this site, when you reach 2k posts you have a better chance. Who needs qualifications when you have dunstonh and MSE (LOL)

dunstonh

I'm considering a career change too. Having read the posts of this thread I'm wondering if I would be better studying for a mortgage advice certificate first before trying to progress to becoming an IFA.

Most IFAs have dropped or are dropping mortgage advice or have become mortgage only advisers. Its got to the point where specialising is more common nowadays. Salesforces tend to have a jack of all trades (master of none) approach still though.

Also I see a lot of posts relate to the CII courses and qualifications, is there any difference in studying for a CEFA or CEMAP qualification with ifslearnings.ac.uk ? I phoned the FSA and they said there is no difference in how these qualifications are recognised in industry, they contain the same material but may be structured differently.

The CEFA and CII versions end up with the same end "certificate" level. Although CII is overwhelmingly the more popular choice (its been said that over 90% of advisers hold the CII versions). Also, the higher level exams only come from the CII at this time.

How easy/difficult would it be for someone to gain a qualification and try and either find a job or get authorised and work self employed?

As an IFA it would be virtually impossible. You cannot expect to go straight to IFA without experience. You certainly cannot go self employed IFA and you need industry experience. You would be a compliance nightmare and the FSA wont give you authorisation and networks will want experience. You would have to join a existing firm first. The exams dont tell you how to write complaint business. You really start learning "on the job". Some salesforces will take you through the process to become an IFA but they tend to have horrible tie ins and financial debts if you dont succeed.

Coming up the FSAs retail distribution review has proposed that IFAs will have to have higher qualifications in future. The level most expected is diploma (four more exams). That would mean sitting 3 cemap exams, 5 certificate level exams and 4 diploma level exams (which only have 2 sitting a year).

Nowadays the main career path to being an IFA tends to be one of two routes:

1 - become a mortgage adviser at an IFA firm and take the full adviser exams whilst doing the mortgage role and learn about being an adviser whilst you do mortgages.

2 - join a tied sales force (like those at a bank) and do time as a tied agent before moving on to being an IFA later. You get to make your mistakes on bank customers (who know no different) and the limited products and transactions you can do allow you to learn the role gradually.

paul5046

Is there any possible route to become an IFA on a part time basis. I do 4on 4off shifts and would even consider doing it for little pay on my days off to get the experience/ training.
Or am i living in cloud cuckoo land.

jack_spratt_2

FPC 1-2 -3 were introduced in about 1995 and to be honest were pretty standard fare they could be achieved with a pretty limited amount of knowledge.
Myself I think your best way forward is try to get hooked up with a bank that would put you through the relevant exams .
After that if you feel confident enough to progress to IFA do it .
But I must warn you as I am sure Dunstonh has !! its not an easy life as regulation changes you must keep up with things !!!once you have got your qualifications it does not end there.
Most successful IFAs are people who have had many years experience and who have built a good customer base up !! it can be very hard to start with and in reality is only for a special type of person .

Another option is a compliance officer with a large company

JobSeeker_3

As an IFA it would be virtually impossible. You cannot expect to go straight to IFA without experience. You certainly cannot go self employed IFA and you need industry experience. You would be a compliance nightmare and the FSA wont give you authorisation and networks will want experience. You would have to join a existing firm first.

How long would I need to do an IFA role with a company before being able to be authorised by the FSA and go self employed?

If I did the CEFA qualification would I be able to study at a higher level with the CII? I'm just thinking that with doing the CEFA qualification I can complete each module and book an exam, there's no deadline dates for exams like with the CII CF5 module.

If I studied with CII for the CFP for CF1 - CF5, how long would you estimate it would take to complete?

What would be my first step if I wanted to do the CFP, register for CF1, buy the study text and register for the exam when I've got through the study text?

What help is available should I need to ask someone something?

The main problem I've had in finding jobs (in I.T.) is the experience barrier, most companies want 2 or 3 years relevant commercial experience before considering you. Currently the way the market is I see jobs being posted where companies are requiring you to have (as an IFA) an existing client base which would be impossible for a newly qualified person to have. Is this just down to the credit crunch which will eventually be easier for a newbie to enter the market?


Thanks again for your advice, I really do appreciate it.

JobSeeker

JamieJM

Jobseeker,

Experience will be just as much of an issue for you if not more so in financial services than IT and that includes in the bank's and building societies as well as IFA firms. This is nothing to do with the credit crunch it is to do with the fact that you will be regulated and authorised by the FSA and therefore have to prove that you are a fit and proper person to be able to give advice - credit checks, criminal record checks, qualifications etc etc. You also need to prove that you can operate compliantly and keep up to date with the ever changing financial legislation and the ins and outs of protection, investments, pensions etc etc, not to mention-shock horror-be able to generate income either through fees or commission.
You give advice that you put your name to and are responsible for so the fact that it is difficult to get a foot in the door with employers who will share this responsibility is nothing to do with the credit crunch. It is to do with the nature of the industry and indeed the complexity of the job and rather than get easier it will only get more difficult!!!

Dunston is quite right it is a profession that you learn gradually and due to the ever changing nature of the industry that you will never stop learning. You do not become a Financial Advisor, Independent or otherwise because you have passed the mandatory exams - just like you can't call yourself a solicitor because you have a law degree.

How long you take to study, sit and pass the exams is ultimately down to you- what your base knowledge is like, how good you are academically and how much time you have to devote to studying- not easy if you will still be employed!!!

You can still study for the advanced certificates with the CII if you have passed CeFAs or CFPs but I think that you will find that the CFPs are just as flexible as the CeFAs. The amount of support that is available is down to how much you want to pay!!! The CII will offer day courses and email tutorials and you can buy CD Roms, tapes etc etc. If you do manage to get in to one of the major institutions this will all be provided for you. I think you're right get the study material and go through it, do a couple of mock tests and then book the exam. Word of warning - be very carefull before buying second hand material, things change so quickly that an out of date text may easily be the difference between passing and failing and ultimately this will be a false economy. When you buy the current stuff from the CII they will send you any updates free of charge.

If you struggle getting someone to take you on as a full financial advisor then it is not a bad idea to start as a mortgage advisor as this will be easier to get in to and form the basis of "relevant experience" and open doors for you. I think if you have CeMAP exam it exempts you from CF1 ????

It has to be said that you will get excellent training and support with one of the banks or building societies and indeed you will get paid whilst you are learning by the reputable/big ones. However they too will be looking for people with relevant experience and in 90% of cases fully qualified. In most cases the banks only recruit externally for people who have or have had recently Competent Advisor Status ie people that are fully qualified and FSA authorised.

Whilst any organisation will admire a self starter for studying and passing your exams- this is not an automatic "in" either as an IFA or multi-tied/tied advisor with a bank. Also don't write off the banks either as a stepping stone or indeed a career option!! They do offer a useful service and access to advice for lots of people who would not otherwise get any!!!! It's true like Dunston says they will have a restricted range from which to recommend but the advice principles are sound and if you can be compliant with a bank/building society then you are far more likely to be compliant as a self-employed IFA - when ultimately the burden for not being compliant is far greater and all on you!!!

jack_spratt_2

JamieJM has given you some really good advice about being a IFA or a financial advisor!! it is not all a bed of roses its extremely hard work !!
After spending many years in the financial services industry you only realize how quickly things change when you retire !!
When you are an IFA you have to compete against other advisers !! why would a person choose yourself with 6 months experience over an advisor with 10 years experience.
Your reputation is built up over years that is how you build up a customer base !!
The safest way to start is to get employment is with a bank !! yes you will have targets but they will help you generate your leads !!( ask yourself if you were an IFA how would you generate your business)
At the end of the day you are risking a lot less going the bank route and will soon find out if this is the type of employment you want !! it is not to every one's taste

dunstonh

The safest way to start is to get employment is with an bank !! yes you will have targets but they will help you generate your leads !!( ask yourself if you were an IFA how would you generate your business)
At the end of the day you are risking a lot less going the bank route and will soon find out if this is the type of employment you want !! it is not to every one's taste

It is horrible working for a bank but it is worth it. They are good at getting you through the exams (that doesnt mean they teach you to know the job. They teach you to pass the exams). They pay you whilst you learn. You get low knowledge customers put in front of you which is ideal for a trainee. You have no financial liability for the advice you give (you do as a S/E IFA) and you get to find out if you can do the role with just 10-15 options before you decide to go into the whole of market with tens of thousands of options and take on that personal liability yourself.

I have known some IFAs go back to tied agent status because they found being an IFA was too hard. These were after many years as a tied agent.

Also, whilst the earnings potential is very good. You shouldnt expect to get there overnight. Its a hard slog in the early years with the benefits later once you are established. Additionally, you should be prepared for costs as an IFA. My expenses exceeded £70,000 last year. You wont have that level in your early years (as you wont buy much and run on a shoe string) but by the time you pay the FSA/FSCS/FOS levies, network charges or compliance charges, software costs etc they will hit your income hard.

Over half of new advisers leave the industry within the first two years. Most common reason is not able to make a living from it due to lack of clients. Starting at a bank and "doing time" is the safest option and probably the one that will increase your chances of success.

Ginger78

Dunston and all,

Thanks for your advice, really is invaluable. Quick question, these bank jobs, doing your time as you say. I think this is very sound advice and definitely the path i will take. Can you advise what i should be looking for though, ie what job title would be good to learn the ropes and gain some customers?

My thanks in advance!