Ifa

HappyHarry

racey wrote: »

Looking at companies found by "Unbiased" I can see advisers with "DipFA" after their name. Another has DipPFS. Does that mean that they are IFAs?
It's not as obvious as, say, Chartered Accountants' qualifications.

DipFA is the diploma qualification for LIBF
DipPFS is the diploma qualification for CII/PFS

There is no qualification to be an IFA rather than an FA.

I'm not sure why you say it's not as obvious as a Chartered accountant's qualification. I think there are more available qualifications to be an accountant than there are to be a financial adviser!

racey

HappyHarry wrote: »

DipFA is the diploma qualification for LIBF
DipPFS is the diploma qualification for CII/PFS

There is no qualification to be an IFA rather than an FA.

I'm not sure why you say it's not as obvious as a Chartered accountant's qualification. I think there are more available qualifications to be an accountant than there are to be a financial adviser!

I realise that there are several different qualifications for accountants. What I meant was that if I see ACA after a name I know it's a chartered accountant.
Anyway, after being warned frequently about not using an FA as opposed to an IFA, I wanted to know how to tell the difference. I'm still not sure :embarasse:embarasse

TheTracker

Financial advice isn't rocket science. I certainly wouldn't be using any 'qualifications' as part of comparative selection, only mandatory pre-selection. They are the bus driver or plumber or dry cleaner of the financial world. Skills an 18yo could qualify for (some say certification is like first year university). What you really want to know is whether they are trustworthy and do they have an unblemished history, and formal qualifications aren't the best proxy for testing that. If what you're looking for is some level of intelligence then you might want to look for one that has previously worked in some other field, such a degree in evidence based science.

HappyHarry

racey wrote: »

I realise that there are several different qualifications for accountants. What I meant was that if I see ACA after a name I know it's a chartered accountant.
Anyway, after being warned frequently about not using an FA as opposed to an IFA, I wanted to know how to tell the difference. I'm still not sure :embarasse:embarasse

Unfortunately, there is no directory that shows all independent advisers.

You will need to find an adviser, and them ask them if they are independent. If they say anything other than "yes", then they are not independent.

The adviser's 'terms of business' will also declare whether or not they are independent.

Chartered advisers would typically have designation APFS or FPFS. However, there is no designation for independence.

Chartered advisers can be independent or restricted exactly the same as non-chartered advisers.

The independent / restricted split is not something that happens with chartered accountants, it's an added complication with advisers.

racey

The OP asked about qualifications and was told "To be an IFA you have to be qualified. So, what do you want to know?"
I was just trying to clarify that statement.
edit: sorry missed above post from Harry

dunstonh

racey wrote: »

Looking at companies found by "Unbiased" I can see advisers with "DipFA" after their name. Another has DipPFS. Does that mean that they are IFAs?
It's not as obvious as, say, Chartered Accountants' qualifications.

Accountants have multiple examination boards too. And different versions of the the exams over the years just the same.

I realise that there are several different qualifications for accountants. What I meant was that if I see ACA after a name I know it's a chartered accountant.

And a chartered financial adviser will have their respective accreditation as well. However, for the vast majority of people, the standard qualifications are fine. And I say that as someone who has further qualifications.

Anyway, after being warned frequently about not using an FA as opposed to an IFA, I wanted to know how to tell the difference. I'm still not sure

An IFA can have no restrictions on where the place business or the types of investments they use. If there is any form of restriction, then they are not IFAs. They become restricted FAs. This could be a minor restriction or it could be a major one. There has been some mission creep on restrictions over the last 4 years since the new definition of IFA came in. Initially, a number of larger IFA firms went restricted but largely mirrored the old IFA definition (just eliminating very high risk areas of business). However, over the last 4 years they have added increased restrictions, such as fund panels and provider panels. Tied agents or whole of market advisers will often try to muddy the waters and give the impression. However, they must never refer to themselves as independent financial advisers. So, if the adviser refuses to say those three words but waffles on about whole of market or words like that then they are not IFAs. There are a small number of boutique style IFAs that limit themselves to one platform and a discretionary investment service. The FCA has been taking action against these (usually telling them to drop the Independent tag). So, if you get an adviser that says they use one platform and a discretionary investment service then you should not consider them a true IFA.

racey

To summarise, the only way to tell if an adviser is independent is to ask them?
Is that correct?

HappyHarry

TheTracker wrote: »

Financial advice isn't rocket science.

Of course not. I'm not sure that a thorough understanding of aerodynamics or fluid mechanics would be particularly useful when advising on pensions. However, a good understanding of investment strategies and pension law would, of course, be invaluable.

I certainly wouldn't be using any 'qualifications' as part of comparative selection, only mandatory pre-selection.

You may not want to, but others may well do so.

They are the bus driver or plumber or dry cleaner of the financial world.

I think you are trying to be insulting. My understanding is that a financial adviser needs a higher level of qualification than a bus driver. However, if I want to travel on a bus, then I would prefer that the person in the very front seat to be a bus driver rather than a financial adviser, or even a rocket scientist.

Skills an 18yo could qualify for (some say certification is like first year university).

Yes, QCF level 4 is often compared to a first year university degree course.

I'm also pretty sure there are no restrictions on 18 year-olds being bus drivers, dry-cleaners, rocket scientists or plumbers.

What you really want to know is whether they are trustworthy and do they have an unblemished history, and formal qualifications aren't the best proxy for testing that.

Most people would want all three in their adviser - trustworthy, unblemished history and formal qualifications. I can't think of anyone that would prefer an adviser that only had two of those three attributes.

If what you're looking for is some level of intelligence then you might want to look for one that has previously worked in some other field, such a degree in evidence based science.

You seem to be implying that financial advisers are unintelligent and don't believe in evidence. You have a very strange, and very misguided view of the profession.

jscol

Thanks for all replies. It's given me lots to think about.
The IFA we are interested in using has told me he is independent (as does his website.)
He has a BSc in maths.
He has the post nominals CFP (CM) and Chartered MCSI.
I understand that this means he is a Certified Financial Planner and is a Chartered Member of the Institute of Securities and Investment.
He has spoken about doing a "lifetime cashflow model"
I realise that qualifications have their limitations when assessing a professional person. However I take it all the above sounds like appropriate pre-selection based on what other have posted?

Out of interest I thought the term "whole of market" basically equated to "independent" but I now thinking this not the case? I was under the impression that asking if an IFA was "whole of market" was a good question.

jscol

In addition I might ask what other think as to his proposed method of charging us.

He would charge a flat fee for a financial review. In addition he said that if we go with his recommendations he would charge a percentage of the money invested.

For a lump sum investment he would change 2% or 3% (depending whether over / under 100k). We not planning a lump sum investment.

For a regular investment plan he would charge 25% of the amount invested in the first year and obviously this could well apply to us. In both cases he would reduce the flat fee charged by the amount collected from whatever investment plan we went with. So if the flat fee was £1000 and we invested £4000 into a pension in year one we would only end up paying £1000.

Is this normal practice? I'm afraid I really don't know what to expect. I realise good financial advice can be expensive which is probably why I have avoided it until this particular issue came up.

Thanks.