How To Become A Independant Financial Adviser?

GjrBartlett

Good Afternoon all,

Firstly, This seemed to be the best board to post this on, as this is where so many IFA's & potential IFA's seem to lurk!

Secondly, A little about myself, I'm 25 and currently an Aircraft Engineer in the RAF & have been since 1998, I fully intend to see out my time and serve my full 22 years at least, the benefit of this it that I will receive a fully paid pension from the day I leave the RAF, possibly when I'm 40!

Thirdly, The reason for this post, I'm sure I share a keen interest with most of you out there..... Money!

However, I wish to take this interest a little further in taking the required steps to become an IFA (Practising part-time whilst i'm still in the RAF, then possibly making it a full time career after I leave).

To do this, I've recently enrolled to study for my CeFA (Certificate for Financial Advisers) via distance learning, I intend to have the completed within 9-12 months.

So my questions for you....

1) Is the CeFA course the right way to get started?

2) AfterI've passed that, What next? Where do I go from there? Is it possible to go it alone, or best to get in touch with an existing firm?

3) Is anybody out there currently studying for their CeFA (or similar qualification)? If so, hows it going?

4) Any potential pitfull? Any tips and good information to share?

If I think of anymore questions, I'll post.

Many Thanks to you all, Your extensive knowledge is greatly appreciated.

Kind Regards

dunstonh

1) Is the CeFA course the right way to get started?

It certainly helps to have it before you apply for jobs.

2) AfterI've passed that, What next? Where do I go from there? Is it possible to go it alone, or best to get in touch with an existing firm?

You will not be able to go it alone. You need industry experience of at least 12 months before you can do that. Most IFA firms wont even consider you without experience due to increased compliance requirements you will have along with your limited resources you will bring with you. Many firms will not consider you unless you have potential to earn in excess of £100k a year.

That usually means starting with a tied salesforce or one of the IFA salesforces or perhaps starting with mortgages (you will need CeMap for that).

4) Any potential pitfull? Any tips and good information to share?

Most new advisers (of any type) do not last 12 months. The old insurance company salesforce route of doing time with them, build up a client bank and then move to IFA no longer exists. Only the banks are viable option to do that now and they are more interested in your sales ability rather than your technical ability. That said, they are a good place to start. Like any qualification, it can take a few years for a lot of it to sink in and its better that you make your mistake on bank customers where you have no liability rather than whilst you are an IFA where you can have a liability.

Unless you have lots of contacts and a client bank to bring to the party, then most IFA firms will not be interested. A few in my area will take on new IFAs but they make them cover their own costs and take upto 70% of their commission. You cannot live on that in the long term.

GjrBartlett

Firstly, Many thanks Dunstonh for you reply,

Therefore what would you recommend I do after I have gained my CeFA qualifiction?

Is there anyother qualifications you would recommend I study for? (However I guess theirs no subistute for hands-on experience)

Is it worth me approaching the major banks or smaller firms? (Bearing in mind that I'm still currently serving in the RAF, therefore I'd would only be able to work part-time).

As I'm in the RAF and currently work on a base with around 2000 "potential" clients is it worth me advertising my services "In-house" for no fee or a minimal charge to gain experience?

Many Thanks once again

dunstonh

The higher qualifications certainly help but they require time and effort and unless you are trading successfully, it isnt worth doing them. They would be a waste of time for a bank adviser for example as the bank adviser hasnt got the product range or authorisation to do the things the higher qualifications allow you to do.

Cemap is probably the best option to begin with. Without it you cannot do mortgages. Any adviser starting out should have cemap. In the early days you wont know if the bulk of your business is going to be mortgages or investments do having both covered is sensible.

Banks are the best place to start but they wont be interested in you on a part time basis. It costs too much in compliance/training for you to only work on part time basis. A local firm may do but dont expect to get paid unless you provide business and expect to have to cover your costs which could be more than you earn on a part time basis.

For example, PI cover could be around £1200 a year (assuming attached to existing firm). FSA levies are £3300 a year. The firm that takes you on will charge you a fee for admin/services. That is around £3600 a year and they will usually take a cut of what you earn as well as they need to make money out of you. This can be as much as 70% on provided leads but more like 30% on self generated.

You really have to be doing the role full time otherwise you are going to find it tough to just cover your costs.