iFA qualifications for retirement advice

BritishInvestor

wjr4 said:

cfw1994 said:

wjr4 said:

BritishInvestor said:

dunstonh said:

There’s also a J05 exam, but as above, it’s unlikely most IFAs will have this, as they simply do not need to. You learn a lot more on the job nowadays than via the exams. 

I took the J05 exam over a decade ago. I don't believe it's available anymore. I thought it was a very good module and should have been made compulsory for those advisers that want to give drawdown advice.  Unless they held a comparable alternative (and there are many alternative or historic units available).     

The problem with getting a consumer to ask an adviser if they hold the AF8 (or any other specific unit) is that the course/exam change over the years and there are multiple examination boards.   So, you could have someone ask if you have AF8 and the adviser says no. But they could hold J05 and G60.

The AF8 is the only one* I know of (but could be wrong) where you actually have to get your hands "dirty" and undertake some genuine financial planning.

*along with the CFP Level 7 case study

https://www.cisi.org/cisiweb2/docs/default-source/cisi-website/qualifications/level-7-financial-plan-assessment-candidate-guidance.pdf?sfvrsn=dc5c1802_20

What about R06? As I mentioned previously, exams are one thing but you learn more on the job now. You are also monitored by compliance until they think you can go it alone. Even then, you still have client files checked, especially if high net worth. You don’t just pass the exams & are left alone to advise. 

What does “You are also monitored by compliance until they think you can go it alone” mean?  Who is compliance?!  Surely compliance would guide any advice from regulated advisors forever?!

zagfles said:

bostonerimus said:

Take a look here for the Level 4 retirement planning syllabus from the CII.

https://shop.ciigroup.org/pensions-and-retirement-planning-r04--r04.html

As with so many financial trade qualifications there's a lot about the basic mechanics and structures of the system, nothing that anyone with common sense and a grasp of basic maths couldn't figure out for themselves. So you are mostly paying for a reassuring hand and to avoid having to learn the stuff for yourself. The thing that frightens me is the "nominal pass mark" is 65% and only 61% of the students passed in 2020.

I've just had a go at the specimen R04 exam in the 2021/22 exam guide, and got 86%!! No study, never worked in the financial services industry or had a related job, just an interested amateur. Learnt a few things from the 7 questions I got wrong! Some questions have rubbish wording eg q.30 but a nice algebra one once I understood the question. Don't understand q.50, how D can be right.

But yes, I certainly wouldn't trust any advisor who only got 65%!!

Interesting.  Not sure where that specimen exam is (link?), but I bet a good few of the regulars on here would do okay🤣

Compliance - the people who so
file checks and ensure you’re doing the job properly. Yes, you are constantly monitored by them, but they can’t file check every single file. 

I think there are many facets to "doing the job properly". For example, a typical adviser flogging products might be considered by compliance to be doing the job properly, but someone that follows a financial planning approach might raise an eyebrow at this approach.

BritishInvestor

zagfles said:

cfw1994 said:

wjr4 said:

BritishInvestor said:

dunstonh said:

There’s also a J05 exam, but as above, it’s unlikely most IFAs will have this, as they simply do not need to. You learn a lot more on the job nowadays than via the exams. 

I took the J05 exam over a decade ago. I don't believe it's available anymore. I thought it was a very good module and should have been made compulsory for those advisers that want to give drawdown advice.  Unless they held a comparable alternative (and there are many alternative or historic units available).     

The problem with getting a consumer to ask an adviser if they hold the AF8 (or any other specific unit) is that the course/exam change over the years and there are multiple examination boards.   So, you could have someone ask if you have AF8 and the adviser says no. But they could hold J05 and G60.

The AF8 is the only one* I know of (but could be wrong) where you actually have to get your hands "dirty" and undertake some genuine financial planning.

*along with the CFP Level 7 case study

https://www.cisi.org/cisiweb2/docs/default-source/cisi-website/qualifications/level-7-financial-plan-assessment-candidate-guidance.pdf?sfvrsn=dc5c1802_20

What about R06? As I mentioned previously, exams are one thing but you learn more on the job now. You are also monitored by compliance until they think you can go it alone. Even then, you still have client files checked, especially if high net worth. You don’t just pass the exams & are left alone to advise. 

What does “You are also monitored by compliance until they think you can go it alone” mean?  Who is compliance?!  Surely compliance would guide any advice from regulated advisors forever?!

zagfles said:

bostonerimus said:

Take a look here for the Level 4 retirement planning syllabus from the CII.

https://shop.ciigroup.org/pensions-and-retirement-planning-r04--r04.html

As with so many financial trade qualifications there's a lot about the basic mechanics and structures of the system, nothing that anyone with common sense and a grasp of basic maths couldn't figure out for themselves. So you are mostly paying for a reassuring hand and to avoid having to learn the stuff for yourself. The thing that frightens me is the "nominal pass mark" is 65% and only 61% of the students passed in 2020.

I've just had a go at the specimen R04 exam in the 2021/22 exam guide, and got 86%!! No study, never worked in the financial services industry or had a related job, just an interested amateur. Learnt a few things from the 7 questions I got wrong! Some questions have rubbish wording eg q.30 but a nice algebra one once I understood the question. Don't understand q.50, how D can be right.

But yes, I certainly wouldn't trust any advisor who only got 65%!!

Interesting.  Not sure where that specimen exam is (link?), but I bet a good few of the regulars on here would do okay🤣

In the link quoted above, download 2021/22 exam guide link on the right, there's a specimen exam in it.

Have a go, I'm sure most regulars here would "pass", even those who use IFAs! Maybe they'll question what score their IFA got

"Maybe they'll question what score their IFA got "

Ideally, 1% more than the pass mark.

zagfles

BritishInvestor said:

zagfles said:

cfw1994 said:

wjr4 said:

BritishInvestor said:

dunstonh said:

There’s also a J05 exam, but as above, it’s unlikely most IFAs will have this, as they simply do not need to. You learn a lot more on the job nowadays than via the exams. 

I took the J05 exam over a decade ago. I don't believe it's available anymore. I thought it was a very good module and should have been made compulsory for those advisers that want to give drawdown advice.  Unless they held a comparable alternative (and there are many alternative or historic units available).     

The problem with getting a consumer to ask an adviser if they hold the AF8 (or any other specific unit) is that the course/exam change over the years and there are multiple examination boards.   So, you could have someone ask if you have AF8 and the adviser says no. But they could hold J05 and G60.

The AF8 is the only one* I know of (but could be wrong) where you actually have to get your hands "dirty" and undertake some genuine financial planning.

*along with the CFP Level 7 case study

https://www.cisi.org/cisiweb2/docs/default-source/cisi-website/qualifications/level-7-financial-plan-assessment-candidate-guidance.pdf?sfvrsn=dc5c1802_20

What about R06? As I mentioned previously, exams are one thing but you learn more on the job now. You are also monitored by compliance until they think you can go it alone. Even then, you still have client files checked, especially if high net worth. You don’t just pass the exams & are left alone to advise. 

What does “You are also monitored by compliance until they think you can go it alone” mean?  Who is compliance?!  Surely compliance would guide any advice from regulated advisors forever?!

zagfles said:

bostonerimus said:

Take a look here for the Level 4 retirement planning syllabus from the CII.

https://shop.ciigroup.org/pensions-and-retirement-planning-r04--r04.html

As with so many financial trade qualifications there's a lot about the basic mechanics and structures of the system, nothing that anyone with common sense and a grasp of basic maths couldn't figure out for themselves. So you are mostly paying for a reassuring hand and to avoid having to learn the stuff for yourself. The thing that frightens me is the "nominal pass mark" is 65% and only 61% of the students passed in 2020.

I've just had a go at the specimen R04 exam in the 2021/22 exam guide, and got 86%!! No study, never worked in the financial services industry or had a related job, just an interested amateur. Learnt a few things from the 7 questions I got wrong! Some questions have rubbish wording eg q.30 but a nice algebra one once I understood the question. Don't understand q.50, how D can be right.

But yes, I certainly wouldn't trust any advisor who only got 65%!!

Interesting.  Not sure where that specimen exam is (link?), but I bet a good few of the regulars on here would do okay🤣

In the link quoted above, download 2021/22 exam guide link on the right, there's a specimen exam in it.

Have a go, I'm sure most regulars here would "pass", even those who use IFAs! Maybe they'll question what score their IFA got

"Maybe they'll question what score their IFA got "

Ideally, 1% more than the pass mark.

Ideally, considerably more than an untrained amateur like me So at least 94%

Maybe they should allow people who want to transfer their DB pension without advice sit an exam like this, maybe better tailored, and if they pass, they don't need to pay several thousand to an IFA to get their pension transferred. Charge a hundred or so to take the test, to discourage the clueless.

wjr4

zagfles said:

BritishInvestor said:

zagfles said:

cfw1994 said:

wjr4 said:

BritishInvestor said:

dunstonh said:

There’s also a J05 exam, but as above, it’s unlikely most IFAs will have this, as they simply do not need to. You learn a lot more on the job nowadays than via the exams. 

I took the J05 exam over a decade ago. I don't believe it's available anymore. I thought it was a very good module and should have been made compulsory for those advisers that want to give drawdown advice.  Unless they held a comparable alternative (and there are many alternative or historic units available).     

The problem with getting a consumer to ask an adviser if they hold the AF8 (or any other specific unit) is that the course/exam change over the years and there are multiple examination boards.   So, you could have someone ask if you have AF8 and the adviser says no. But they could hold J05 and G60.

The AF8 is the only one* I know of (but could be wrong) where you actually have to get your hands "dirty" and undertake some genuine financial planning.

*along with the CFP Level 7 case study

https://www.cisi.org/cisiweb2/docs/default-source/cisi-website/qualifications/level-7-financial-plan-assessment-candidate-guidance.pdf?sfvrsn=dc5c1802_20

What about R06? As I mentioned previously, exams are one thing but you learn more on the job now. You are also monitored by compliance until they think you can go it alone. Even then, you still have client files checked, especially if high net worth. You don’t just pass the exams & are left alone to advise. 

What does “You are also monitored by compliance until they think you can go it alone” mean?  Who is compliance?!  Surely compliance would guide any advice from regulated advisors forever?!

zagfles said:

bostonerimus said:

Take a look here for the Level 4 retirement planning syllabus from the CII.

https://shop.ciigroup.org/pensions-and-retirement-planning-r04--r04.html

As with so many financial trade qualifications there's a lot about the basic mechanics and structures of the system, nothing that anyone with common sense and a grasp of basic maths couldn't figure out for themselves. So you are mostly paying for a reassuring hand and to avoid having to learn the stuff for yourself. The thing that frightens me is the "nominal pass mark" is 65% and only 61% of the students passed in 2020.

I've just had a go at the specimen R04 exam in the 2021/22 exam guide, and got 86%!! No study, never worked in the financial services industry or had a related job, just an interested amateur. Learnt a few things from the 7 questions I got wrong! Some questions have rubbish wording eg q.30 but a nice algebra one once I understood the question. Don't understand q.50, how D can be right.

But yes, I certainly wouldn't trust any advisor who only got 65%!!

Interesting.  Not sure where that specimen exam is (link?), but I bet a good few of the regulars on here would do okay🤣

In the link quoted above, download 2021/22 exam guide link on the right, there's a specimen exam in it.

Have a go, I'm sure most regulars here would "pass", even those who use IFAs! Maybe they'll question what score their IFA got

"Maybe they'll question what score their IFA got "

Ideally, 1% more than the pass mark.

Ideally, considerably more than an untrained amateur like me So at least 94%

Maybe they should allow people who want to transfer their DB pension without advice sit an exam like this, maybe better tailored, and if they pass, they don't need to pay several thousand to an IFA to get their pension transferred. Charge a hundred or so to take the test, to discourage the clueless.

AF7 is the DB exam FYI 

bostonerimus

My feeling is that an IFA can provide a plan for the unknowledgeable and useful validation for people who have done a bit of their own research, but for most people there is no need for on going advice and annual fees once they are set on a sensible financial path using tax efficient accounts. I have a friend back in the UK who has a USS pension an ISA and a mortgage. She is in her early 40s and has a good emergency cash account and the rest she puts into global equity funds and extra mortgage payments. She plans to move into the USS default target retirement fund in her 50s. She has a simple plan and is sticking to it.

Ibrahim5

Ongoing fees is the new scam that has taken over from commission. It's a bit like income tax. If the government paid you £120k and then asked for a £30k income tax cheque you would be furious about the cost of income tax. IFAs take their fees out of the investments so people don't really notice the cost. People should be made to write a cheque out for IFA fees.

Ibrahim5

I remember when they banned commission the IFAs said they would charge per hour. £250 an hour. This was when say a nurse who is much more highly qualified than an IFA would be on less than £10 an hour. Everyone laughed at them. So they invented the small percentage of large amount charging model like estate agents.

JoeCrystal

Ibrahim5 said:

I remember when they banned commission the IFAs said they would charge per hour. £250 an hour. This was when say a nurse who is much more highly qualified than an IFA would be on less than £10 an hour. Everyone laughed at them. So they invented the small percentage of large amount charging model like estate agents.

That is why you paid agreed fixed fees beforehand. Besides, the starting salary of a nurse at the time wasn't certainly under £10 per hour, and I think it was £11 per hour or so, and that is the most basic salary a nurse would be on. Of course, Inner London allowance would add 20% on top plus a very generous pension scheme. So median wise, it would be relatively higher than the starting salary. Much higher indeed. Please also bear in mind that according to the Which article published a few days ago, the cost of financial advice is £30 to £250 per hour.

Indeed, I am concerned that the only posts you ever do on this forum are to complain about the IFAs' charging fees. It is getting rather exasperating to see the same old recycled grumblings from you. Have you contemplated answering questions or helping others on this particular forum? I am sure you got a depth of knowledge that would be useful in retirement planning.

BritishInvestor

bostonerimus said:

My feeling is that an IFA can provide a plan for the unknowledgeable and useful validation for people who have done a bit of their own research, but for most people there is no need for on going advice and annual fees once they are set on a sensible financial path using tax efficient accounts. I have a friend back in the UK who has a USS pension an ISA and a mortgage. She is in her early 40s and has a good emergency cash account and the rest she puts into global equity funds and extra mortgage payments. She plans to move into the USS default target retirement fund in her 50s. She has a simple plan and is sticking to it.

What sample set of people did you use to determine this?

"but for most people there is no need for on going advice and annual fees once they are set on a sensible financial path using tax efficient accounts"

bostonerimus

BritishInvestor said:

bostonerimus said:

My feeling is that an IFA can provide a plan for the unknowledgeable and useful validation for people who have done a bit of their own research, but for most people there is no need for on going advice and annual fees once they are set on a sensible financial path using tax efficient accounts. I have a friend back in the UK who has a USS pension an ISA and a mortgage. She is in her early 40s and has a good emergency cash account and the rest she puts into global equity funds and extra mortgage payments. She plans to move into the USS default target retirement fund in her 50s. She has a simple plan and is sticking to it.

What sample set of people did you use to determine this?

"but for most people there is no need for on going advice and annual fees once they are set on a sensible financial path using tax efficient accounts"

The "entirely off the top of my head" sampling method with a bit of my personal experience and that of my friends, family and colleagues. Their financial lives are just not that complicated. I've also managed to keep my finances simple: understood my budget, spend less that I earn, bought a house, saved for retirement and in general accounts using simple index funds. I never felt the need for advice and I think most working people will be in a similar situation most of the time. However, I am going to take advice from a lawyer about my will and estate planning. Getting advice is sometimes very prudent and necessary, paying an annual retainer to an IFA isn't necessary IMO.