Chartered Financial Planner v Independent Financial Adviser

GSP

One and the same?
Does one offer more than the other?
Quite different?
What’s best?

Clive_Woody

I assume the chartered one is not independent so can only sell from a limited range of products. Personally I would look for an IFA. 

HappyHarry

GSP said:

One and the same?
Does one offer more than the other?
Quite different?
What’s best?

They are part of two different categories.

An Independent Financial Adviser (IFA) works for you, and can arrange and advise on products from the whole market. The other type is a financial adviser (FA) who works with a limited range of products and/or providers,  meaning they would be unlikely to provide you with the best advice. You should always chose an IFA.

A Chartered Financial Planner has a far higher level of qualification than a non-chartered adviser. For advice you such as starting to build up investments or straightforward pension advice, then taking advice from either a non-chartered or chartered adviser would be fine. For more complex scenarios, a chartered financial planner would usually be better, though they tend to be more expensive. 

The best advice is likely to come from a IFA who is chartered.

Likely order of best advice:

1st: Chartered IFA
2nd: Non-chartered IFA
3rd: Chartered FA (be very very careful, in fact - chose an chartered IFA)
4th: Non-chartered FA (don't go there)

dunstonh

95% of the population would find the qualifications obtained by the chartered qualification unnecessary.    A lot of advisers have some of the qualification modules for chartered but not all of them.  It is very common for pensions to be a popular module for those that have additional/higher qualifications but haven't gone the whole hog.

If you are very high net worth or have complex affairs or trust work is involved, then this is often where the chartered level comes into its own.

Chartered advisers usually cost more.  So, if you are a mainstream individual with mainstream needs, there is usually not the need to pay more for chartered.

wjr4

Clive_Woody said:

I assume the chartered one is not independent so can only sell from a limited range of products. Personally I would look for an IFA. 

This is incorrect 

Albermarle

If you are very high net worth or have complex affairs or trust work is involved, then this is often where the chartered level comes into its own.

An average person would consider someone having a Million pound pension pot to be rich,  but as I understand it dealing with this level of funds is common for 'normal' IFA's ?

So what would consider 'very high net worth ' to mean ? £3Million, £10 Million ? ( appreciate the complexities of a situation also play a part) 

dunstonh

Albermarle said:

If you are very high net worth or have complex affairs or trust work is involved, then this is often where the chartered level comes into its own.

An average person would consider someone having a Million pound pension pot to be rich,  but as I understand it dealing with this level of funds is common for 'normal' IFA's ?

So what would consider 'very high net worth ' to mean ? £3Million, £10 Million ? ( appreciate the complexities of a situation also play a part) 

You can have very many millions of pounds and not have complex affairs or vice versa.  So, its difficult to put a figure on it.    I recall when a major IFA network decided to end its IFA status (and ultimately close down) that it said 99.1% of the transactions it carried out were mainstream and just 0.9% were non-mainstream (it classed EIS, VCTs etc as non mainstream).

The chartered qualification is a collection of modules.  Each module gets a number of credits and you have to achieve 120 level 6 credits to be chartered.  There are currently 6 modules available worth 160 credits but there are  historic modules going back decades which could count towards it.

And where it gets potentially complicated (if this sort of thing bothers you) is that you could have two advisers; one is chartered, the other is not.  However, the non-chartered one could have sat and passed the personal tax and trust planning module but the chartered one may not have sat that one.   So, does that make the non-chartered adviser more suitable than the chartered one if your needs fall under that area?

As I mentioned previously, many advisers have further qualifications but haven't gone the whole way. They have focused on the areas relevant to the clients that they typically see.    Someone who positions themselves as a retirement income specialist will take further qualifications there.  Someone who positions themselves as a trust specialist will take further qualifications that way. Someone who focuses on Business financial planning will take further qualifications in that direction.

As we are in the pensions section, I personally feel the standard pensions qualification was weak.  Perfectly fine for accumulation but absolutely dire for income (it may have improved since I sat the exams).    So, for retirement income planning, I would want an adviser with further qualifications in retirement income planning.