Thinking of a career as a Paraplanner/Financial Planner/IFA

edinburgher

I want to start a career that I will actually enjoy and like many of you on here, I’m fascinated with personal finance/products/economics. I would also love a role with an ongoing focus on CPD and learning, and the careers detailed above all seem to tick that box.

My background isn’t in financial services, although I have plenty of experience of posts where there has been a strong customer focus. I can also write and analyse reports, am numerate and am not put off by process driven work and the admin involved with compliance. I’m happy to undertake further study and can fund this myself if needed.

Could any of the IFAs on the forum (or anyone else who has experience of the careers mentioned) offer their thoughts on the following?

• What is the likely route into working as an IFA? I realise that it is not a career that you leap into and it takes effort and experience to be prepared for the demands. My (limited) plan at this point would be: apply for branch based bank roles, start the CII Regulated Diploma in Financial Planning in my own time, try for an admin/trainee paraplanner role with an IFA in 18-24 mths
• For IFAs specifically – do you employ paraplanners? If so, are they supported to develop their skills so that they could transition into IFAs in future, or is there a divide between the technical support side of the business and what you do?
• Do you think the RDR will restrict career opportunities in your sector in future?
• What are the most important qualities for an IFA?
• If you could go back in time and give yourself any tips at the start of your career, what would they have been?

Aegis

edinburgher wrote: »

I want to start a career that I will actually enjoy and like many of you on here, I’m fascinated with personal finance/products/economics. I would also love a role with an ongoing focus on CPD and learning, and the careers detailed above all seem to tick that box.

My background isn’t in financial services, although I have plenty of experience of posts where there has been a strong customer focus. I can also write and analyse reports, am numerate and am not put off by process driven work and the admin involved with compliance. I’m happy to undertake further study and can fund this myself if needed.

Could any of the IFAs on the forum (or anyone else who has experience of the careers mentioned) offer their thoughts on the following?

Sure, and feel free to PM me with any discussions you'd prefer not to ask in public, for whatever reason (not thinking about things like salary here, more along the lines of "have you heard of X firm, are they any good?").

What is the likely route into working as an IFA? I realise that it is not a career that you leap into and it takes effort and experience to be prepared for the demands. My (limited) plan at this point would be: apply for branch based bank roles, start the CII Regulated Diploma in Financial Planning in my own time, try for an admin/trainee paraplanner role with an IFA in 18-24 mths

I can only assume that it's harder than ever to get into financial advice as it currently stands. The bank route used to be an option, but most of the banks have now shut their salesforces down, so if you went there you'd either be a mortgage adviser or an unregulated customer services/sales officer. Either option is a very thankless job and doesn't represent genuine financial advice at all.

I expect that at present you're likely to be better off finding an admin job or a trainee role with an existing financial planning firm. This might mean working for one of the larger restricted firms rather than diving straight in to independent advice, but you'll learn much more useful stuff by going down that route and will therefore be much better prepared to step into an advisory role once you're qualified.

For IFAs specifically – do you employ paraplanners? If so, are they supported to develop their skills so that they could transition into IFAs in future, or is there a divide between the technical support side of the business and what you do?

We don't, however our trainees tend to be paraplanners at first, developing into advisers as time passes. There are other firms where the paraplanners have a defined career path which keeps them in the paraplanning role unless they specifically want to do the adviser job, so there's no hard and fast rule.

Do you think the RDR will restrict career opportunities in your sector in future?

Yes, though hopefully this will right itself when the dust settles a bit, as the average age of an adviser is still very high, indicating there are too few trainees ready to take over when the current old guard retire.

What are the most important qualities for an IFA?

Listening, research ability, knowledge retention, analytical mind, communication skills. There are likely a lot more, but these are the most important to me.

If you could go back in time and give yourself any tips at the start of your career, what would they have been?

I'd have recommended getting into my career earlier. If I could go back still further, I'd likely change my degree to something financey instead of engineering.

edinburgher

Aegis - many thanks for the thought provoking answers to the questions posed - you have given me lots to consider and I may take you up on that PM offer at some point :beer:

Either option is a very thankless job and doesn't represent genuine financial advice at all.

That had been my concern. Does generic financial services experience like this (even low quality experience in terms of financial 'advice') count for *anything* in the eyes of a prospective IFA employer, or would enthusiasm and starting out towards a diploma independently serve me better?

Your thoughts re. career routes once I had made a start in the profession are appreciated and provided some much needed padding around my understanding of the options available.

If you don't mind me asking, when did you start in your current career? I'm currently 29.

Aegis

edinburgher wrote: »

Aegis - many thanks for the thought provoking answers to the questions posed - you have given me lots to consider and I may take you up on that PM offer at some point :beer:



That had been my concern. Does generic financial services experience like this (even low quality experience in terms of financial 'advice') count for *anything* in the eyes of a prospective IFA employer, or would enthusiasm and starting out towards a diploma independently serve me better?

It counts for something, but it's generally seen as low-knowledge, low-skill and low-accountability work (not that all people in these roles demonstrate these characteristics, only that the roles themselves don't require anything more than that). Bank-based mortgage advisers are essentially order takers inputting data into a system which ultimately decides what they can do for them. The protection sales on top of that will be very limited, so you won't get experience at researching the best product or tailoring a solution to a client, only working out what the client doesn't have and shoehorning them into the bank's preferred solution.

On top of that, there has been a lot of press chatter lately about banks removing sales incentivisation, but I would be shocked if this major cultural change happened simply because the higher ups say it will. I predict that regional staff and branch managers will continue to put pressure on their underlings to sell to everyone walking in, under the guise of "making sure the customer's finances are in order".

If you do go in, keep looking around at better solutions and make sure you don't start buying in to the message that severely restricting the range of options leads to better results - it's simply not true.

Your thoughts re. career routes once I had made a start in the profession are appreciated and provided some much needed padding around my understanding of the options available.

If you don't mind me asking, when did you start in your current career? I'm currently 29.

My first stint in a bank started when I was 25, and I finally got employed as an independent financial adviser rather than any other financial services role when I was 29, though that was still with a hefty degree of support!

dunstonh

Aegis has given a very comprehensive response.

Career path for those wanting to become IFAs has changed over the years. It used to be a case of starting out with an insurer and then move onto IFA later in life after you got your experience, qualifications and some clients. Then the insurers mostly pulled out of advice and the banks stepped up. Now they have pulled out and it will be interesting to see where new recruits come from.

Going straight to IFA is hard. You don't actually learn what you are doing until a number of years after you pass the exams when the learning actually begins to click into place through experience. Having time spent as a tied agent restricted your ability to make mistakes as you only had a few products and limited investment options. Plus, if you did make a mistake, the bank/insurer picked up the loss. Having say 5 products and 10 investment options at a bank is a lot easier than 50,000 investments and thousands of products. What you tend to find happened as tied agents would either become brainwashed by their employer to thinking they were better than IFAs or the tied agent would become increasingly frustrated at the lack of quality and then move to IFA.

The current trend for career path does seem to be starting out with mortgage and insurance and then learning on the job to become an IFA down the road. That is probably the least frustrating option as you know if you work as a tied agent for a bank or insurer that your products will be typically low quality and expensive. However, it is probably the cheapest option as they usually pay for the training and qualifications. Mortgage and insurance is a slower route but it does allow you to take things in stages and learn over time than the banks who really throw you in at the deep end.

The biggest issue in any service industry is number of clients. Financial services is no different. Over half of new advisers leave the industry within 2 years. Lack of clients is the most common reason. After that, you have communication skills. I have known some very high skilled and knowledge advisers struggle because they cannot communicate well. Unfortunately, prior to RDR, some low knowledge advisers with good communication skills were able to wing it. RDR has largely removed a lot of them or forced them up a level.

Beware of training companies making false promises. I dont know if they are still around but years ago there were some "professional" training companies making promises of jobs for those that passed and you had to pay them a lot of money to get qualified. They were little more than training sessions to get you to pass the exam and with a glut of positions available back then, it was easy to get placed. With the high turnover of staff, there were always positions available. Not now.

So, its not easy and more fail than succeed. If you get it right it can be financially rewarding and enjoyable.

IFAs are getting older as the younger ones havent been coming through as fast. Many want to keep the business but want someone younger to do more of the running around and dealing with the lower end values. So, perhaps that is where the next career path will be for new and upcoming advisers. Plus, with increased workload, you cannot look after the same number of people that you once did. A paraplanner may help. A good paraplanner is worth their weight in gold but good ones are hard to find. It can be part of the career path quite easily.

edinburgher

Thanks for your thoughts dunstonh - can I query one paragraph that confused me slightly?

The current trend for career path does seem to be starting out with mortgage and insurance and then learning on the job to become an IFA down the road. That is probably the least frustrating option as you know if you work as a tied agent for a bank or insurer that your products will be typically low quality and expensive. However, it is probably the cheapest option as they usually pay for the training and qualifications. Mortgage and insurance is a slower route but it does allow you to take things in stages and learn over time than the banks who really throw you in at the deep end.

Who would I be looking to work for with the 'mortgage and insurance' route mentioned in the last sentence? I had assumed you had meant working as a tied agent for a bank or an insurer, but the tail end of that sentence had me wondering whether or not I had picked up on your meaning correctly.

dunstonh

edinburgher wrote: »

Thanks for your thoughts dunstonh - can I query one paragraph that confused me slightly?



Who would I be looking to work for with the 'mortgage and insurance' route mentioned in the last sentence? I had assumed you had meant working as a tied agent for a bank or an insurer, but the tail end of that sentence had me wondering whether or not I had picked up on your meaning correctly.

Ideally, you do the mortgage qualifications in your own time to become qualified before you apply to IFAs firms. Banks tend to want you to become everything at once or go through the bank clerk experience first which could take years to even get to mortgage side.

edinburgher

I see, thanks for the clarification.

Would something like the CII Certificate in Mortgage Advice be a good starting place?