Thinking of becoming an IFA

Aegis

Ginger78 wrote: »

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!

If you're looking to become an IFA in the long run, you'd better go for a regulated role that leads to Competent Adviser Status, otherwise you'll effectively be doing a role that doesn't lead the way you want to go. Trainee financial planner or trainee mortgage manager will get you moving in the right direction. A relationship manager role with financial planning qualifications will get you some of the way there too.

The other route you might want to consider is the administrator -> paraplanner route. I'm not sure how easy that is though, as it's not the route I've gone down.

thedawsonhousehold

I've been reading this with great interest. I have an I.T background and would like to get into becoming an IFA via the bank. Are the CeMap qualifications 1,2 and 3 a start on the right path?

Lokolo

thedawsonhousehold wrote: »

I've been reading this with great interest. I have an I.T background and would like to get into becoming an IFA via the bank. Are the CeMap qualifications 1,2 and 3 a start on the right path?

CeMap is mortgage advice...

thedawsonhousehold

Thanks for the reply


So if I became a mortgage advisor with a bank and did CeMap 1,2 and 3 would I then be able to
join a IFA firm as there mortgage adviser and take the full adviser exams whilst doing the mortgage role and learn about being an adviser whilst I do mortgages?

Aegis

thedawsonhousehold wrote: »

Thanks for the reply


So if I became a mortgage advisor with a bank and did CeMap 1,2 and 3 would I then be able to
join a IFA firm as there mortgage adviser and take the full adviser exams whilst doing the mortgage role and learn about being an adviser whilst I do mortgages?

In short, no. Generally speaking IFA firms will be looking to take on people with a proven track record in financial sales or administration. You might be able to get a job as a mortgage broker or a trainee financial adviser, but that's much more likely to be through a tied agency or a high street bank than through an IFA.

Some IFAs do recruit new entrants and train them up from scratch, but these seem to be few and far between.

newifa

Hi like a few people on this thread i am thinking of a slight career change to become an IFA.
I have well over a decade working in financial services, some of that time on the shop floor, some working on regulatory requirements to the fsa, some in investment banking etc and have done more courses on ethics, money laundering, fraud etc than I can possibly remember.
I have been given VR with a nice pay off and now have 6 months to a year where i can fully concentrate on something new.
The new exams from cii R1-6 for a diploma in regulated financial planning , seem pretty straight forward but I was wondering what other exams apart from these would be essential for a starting IFA.
I would be starting as a single practice limited company with a small office, maybe offering advice to start up businesses as well(something i have done in the past).
Any help or advice would be appreciated, particularly with the new changes coming next year for the industry it seems to be moving from a place for cowboys to something where an honest man can best help people and get paid a good wage for doing it.

dunstonh

The new exams from cii R1-6 for a diploma in regulated financial planning , seem pretty straight forward but I was wondering what other exams apart from these would be essential for a starting IFA.

The "R" exams are fine for a new starter. However, after those, I would look at some of the J0x exams. These are more detailed and go more in depth. There have been some new ones launched as well which are topical (although daftly you can book the exam but they havent released any study material for them yet)

I would be starting as a single practice limited company with a small office, maybe offering advice to start up businesses as well(something i have done in the past).

That may not be possible. As you have never held competent adviser status you may well find that you cannot go straight to "own firm" adviser. I am not sure the restrictions that exist nowadays on that so check it out.

Any help or advice would be appreciated, particularly with the new changes coming next year for the industry it seems to be moving from a place for cowboys to something where an honest man can best help people and get paid a good wage for doing it.

The changes started in 1988 and have been progressively moved on over the years in stages. If you look at most issues that have occurred on advice cases then they are largely historical. Although the salesforces still manage to put their foot in it from time to time but then that is the risk of salesforces. The RDR should go some way to rein them in. However, for the rest of the existing advisers, it will be very much business as usual other than a few new forms here and there and maybe different terminology for things they have already been doing.

Aegis

newifa wrote: »

Hi like a few people on this thread i am thinking of a slight career change to become an IFA.
I have well over a decade working in financial services, some of that time on the shop floor, some working on regulatory requirements to the fsa, some in investment banking etc and have done more courses on ethics, money laundering, fraud etc than I can possibly remember.
I have been given VR with a nice pay off and now have 6 months to a year where i can fully concentrate on something new.
The new exams from cii R1-6 for a diploma in regulated financial planning , seem pretty straight forward but I was wondering what other exams apart from these would be essential for a starting IFA.
I would be starting as a single practice limited company with a small office, maybe offering advice to start up businesses as well(something i have done in the past).
Any help or advice would be appreciated, particularly with the new changes coming next year for the industry it seems to be moving from a place for cowboys to something where an honest man can best help people and get paid a good wage for doing it.

When changing jobs relatively recently I was offered two choices: work essentially for myself for a commercial brokerage, setting everything up for myself and being in charge of all compliance, research, etc, or work for an established firm where I could train for a while with more experienced advisers and learn how to deal with all of these matters with a pre-existing support network in place.

In spite of being offered nearly £10,000 more a year basic salary at the first place, I chose the latter because I felt I needed a lot more practical experience before even attempting to go it alone as an adviser. I do not regret my decision even slightly, and am very unlikely to move firms for the foreseeable future, as my employer is an extremely professional organisation with some fantastic staff and a wealth of good opportunities for me.

To emphasise my point, consider the following issues (not really needing you to post answers, but consider the matters and think about whether you have the experience in these areas):

Simple stuff:

• Platform, Wrap or Direct for OEIC offerings?
• Where do you source your investment data from?
• How do you select the investments that a new client would like to hold in their ISA, pension and direct portfolio?
• When do you recommend a SIPP instead of a personal pension?
• Which providers do you deal with for insurance quotes?
• Which type of insurance do you recommend for specific requirements, (e.g. term , whole of life, family income benefit, keyman, etc)?
• How do you set up an agency with a provider?

Intermediate stuff:

• How do you decide when a client might be better off with a discretionary managed portfolio rather than a portfolio under advice?
• If you use a discretionary manager, how do you select one for a client from the fairly large number of providers?
• When might you use an offshore bond, and which providers give the best terms for your clients when using such a facility?
• When surrendering offshore bonds, how is the tax charge calculated and what considerations need to be made regarding age-related personal allowances?
• When is VAT applicable on your fees, especially important if you are using offshore bonds?
• How do you determine if a client should take an annuity rather than using income drawdown?
• Should you recommend that your clients use flexible drawdown? If so, how do you suggest they manage their withdrawals?
• How do you decide which estate planning methods are going to be best for your client (absolute gifting, simple gifting to trusts, insurance, discounted gift bond, gift and loan schemes, equity release and gifting, gifting from regular income, exempt assets, etc)?

Advanced:

• When might a client be best served accessing a QROPS or QNUPS arrangement?
• If you client is thinking of temporarily moving to France or Spain in the next few years, what are the tax implications of retaining their their offshore bonds and drawdown pensions?
• How can you get around issues of non-residency when renewing or converting term assurance policies?
• For high net worth clients, how do you decide whether they should look to invest into unregulated schemes with a proportion of their investments? How do you document this to comply with FSA requirements?
• When might a SSAS be more appropriate than a SIPP for pension provision?

Bear in mind that the above is simply advice-related issues, nothing to do with FSA returns, levy payments, dealing with complaints, etc, all of which is going to require either considerable additional work on your part or payment for compliance from a third party. On top of that you have the issues that dunstonh mentioned regarding getting signed off as a firm's sole adviser in the first place, which I imagine would be impossible without prior experience.


While I don't want to put you off the career, I think you need to be realistic about your approach. In all likelihood you don't yet have the experience to go it alone as an adviser, therefore you would undoubtedly be better off getting a trainee job with an existing IFA who can train you up on the admin side and put you through your exams. With any luck you'll learn a lot very quickly, and if you still want to set your own business up in a few years you'll be able to leave with a huge number of relevant contacts and with direct experience of giving financial advice.

newifa

Thanks for the very quick response.

The compatent advisor status is something I think I will need to check with the fsa, on researching quickly it seems that different people have different opinions, so definately something that i need to get a straight answer on.

There are some more detailed courses I would hope to do once up and running and business is probably pretty slow whilst I am building up the client base but from the sounds of it the R1-6 should get me upto that level.

Since your an experienced IFA what's the simple deal with the CA rules I've read lots of different figures for what needs to be in place from 10 upto 25k down to nothing depending on what services you give.

Also i was wondering about contacting an ifa outside my area to see if i could sit with them for a few days and maybe do some simply work for free to get a feel and advice on missing that biggest pit falls, but am not sure how they will take it.

Cheers

newifa

I was thinking about one of the firms that provide a wrapper service for IFA's and associated software etc.
TBH i am still at the investigation stage rather than detailed planning stages and am drawing up a list of pro's and con's with each approach for my needs with costs.
i would like to work for a company first, but the personal drawback for me is that my daughter is disabled and my wife wheelchair bound at the current time which is why working for myself appeals to me. I can arrange appointments around doctors times etc and I am quite happy to work until midnight catching things up as it's how i used to work at my last employer.