Thinking of becoming an IFA

newifa

dunstonh wrote: »

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.

thanks for that i spoke to the fsa today and they confirmed that due to the new regulations competent advisor status is now nolonger needed as long as you pass the r1-6 exams (thats if you want to set up as an ifa by yourself).

dunstonh

newifa wrote: »

thanks for that i spoke to the fsa today and they confirmed that due to the new regulations competent advisor status is now nolonger needed as long as you pass the r1-6 exams (thats if you want to set up as an ifa by yourself).

It seems funny that they would go backwards. To allow a inexperienced new adviser to also be their own compliance officer seems like it would be asking for trouble. You would be checking your own work for errors.

Still, overall, advisers are not really the cause of most of the issues so maybe they have realised this and are focusing on the areas that do cause the trouble (ok, that was wishful thinking I know!)

BobQ

dunstonh wrote: »

. Did you know that a self employed IFA has a personal lifetime financial liability for the advice given? .[/QUOTE

Dunstonh, out of curiosity, I presume this liability is a risk you can insure against, but in your experience does this affect the quality of the advice (some) IFAs give?

dunstonh

Dunstonh, out of curiosity, I presume this liability is a risk you can insure against, but in your experience does this affect the quality of the advice (some) IFAs give?

You can insure against the risk but it typically means paying the insurance premium well into retirement. Long after you stopped giving advice as the insurance is not for the year the business is done but the year the complaint is made.

Also,there is no 15 year stop gap either. IFAs are almost unique in professions from not getting that.

I cant speak for everyone but I do think it does affect the advice if you know that you are going to have to pay to put it right. You may not have to pay the full amount but the typical excess is around £2500. Plus, the insurance does not cover FOS fees or compliance fees if you employ an outside company to handle it.

Aegis

newifa wrote: »

thanks for that i spoke to the fsa today and they confirmed that due to the new regulations competent advisor status is now nolonger needed as long as you pass the r1-6 exams (thats if you want to set up as an ifa by yourself).

Even if it's possible, did you read through my list of examples of what you'd need to know and understand to be an effective adviser? Do you think you can supply all of that without gaining some experience?

You said earlier that the industry is no longer a place for cowboys, but do you think you'll really do any better if you don't know the subject matter inside and out before working alone? As an adviser there are a lot of ways you can make a mistake simply by being inexperienced, and in many cases those mistakes might have permanent consequences.

Think very carefully before trying to do this, there is a LOT you can get wrong.

dunstonh

You said earlier that the industry is no longer a place for cowboys, but do you think you'll really do any better if you don't know the subject matter inside and out before working alone? As an adviser there are a lot of ways you can make a mistake simply by being inexperienced, and in many cases those mistakes might have permanent consequences.

Its a good point as the training material assumes generics. It does not take into account market trends (pricing for example). A good example of this is Friendly Society savings plans. My compliance company have issued warnings that they would now be likely viewed as mis-sales on complaint. I have said on here for years that they are poor value compared to alternatives. However, the training material (which has to meet FSA approval) would still expect you to recommend Friendly Society plans in your example cases. Despite you not going anywhere near them in the real world.

It was a long time ago but I reckon it took at least 2 years for the very basic stuff to really sink in. It can take a heck of a lot longer for the more detailed stuff to. You need the hand holding and checking and people to refer to in the early years.

newifa

Aegis wrote: »

Even if it's possible, did you read through my list of examples of what you'd need to know and understand to be an effective adviser? Do you think you can supply all of that without gaining some experience?

You said earlier that the industry is no longer a place for cowboys, but do you think you'll really do any better if you don't know the subject matter inside and out before working alone? As an adviser there are a lot of ways you can make a mistake simply by being inexperienced, and in many cases those mistakes might have permanent consequences.

Think very carefully before trying to do this, there is a LOT you can get wrong.

hi Aegis, I can answer some of them, but not most, however I wouldnt expect to be able to as I've not done any of the courses, read the latest information for IFA's or kept up with market trends as I am still in the fact finding stages as to whether its a possibility or not.

For yourself and Duns your help is very appreciated there are many options once your able to practice as an IFA though, I could decline to take on any cases that were not straight forward or i didn't feel comfortable taking ( particularly as talking to most ifas 80% of the work is very samey and straight forward). I could possibly link up with an existing IFA firm to either do the more complicated cases or to help with them(giving them most of the money earned, but gaining me experience), or I could work for a local IFA on minimum wage for a while. Tbh there are alot of decisions to make any of them I won't be able to make until I'd done and passed my exams.

dunstonh

I'm a bit worried looking through this, because it seems like you need a background working in pure finance.

You dont but it helps. Personally, I have accounting, economics and some of the chartered institute of bankers qualifications and whilst economics comes in handy as the principles are mostly consistent over time, the others are largely so out of date that they dont help at all.

I have been working since I left school, as a paralegal and then as a legal exec - mostly in the realms of corporate and tax law.

That fine as it will help. Not in the financial side but in understanding the contract side and why so many of the rules exist. Plus, you must have had a trained mind and you need that more than anything else.

you all seem like you've been in the thick of it for years.

It does seem a bit scary as I head towards 25 years in financial services. If feels just like yesterday.

would any of you give me a job if I rocked up with my CV??

As an IFA...probably not. I prefer industry experience as see a track record. As a paraplanner who wants to learn the IFA side whilst doing the administration and planning side, then possibly I would.

upthegas

Hi there,

I have a slightly different scenario to anything I've seen so far on this forum...

I have been working in the Middle East as an IFA for 3 years, totalling 5 years in financial services. I only held the CII FAIQ (International advice) as there were no other requirements. My education consisted of employer training and self study.

I am now resident back in the UK and have undertaken the RO exams, I hold RO's 1 through 5 and am completing the Dip (RO6) next month (Apr 2012).

My question is; what would be the quickest and most pain free way to get CAS status? I am aware of a few options but they are offering peanuts in remuneration and 2 gruelling years of telesales, admin and paraplanning in return for CAS status and a bottom cut of the client bank to start me off.

Are there any schemes out there that can fast track a qualified, but UK inexperienced adviser?

Any advice is really appreciated!

Thanks