Career choice - Mortgage Advisor v IFA?

DerryBoy_2

Hi,

I'm currently training to become a mortgage advisor. I've just completed CeMAP 1 and started studying for CeMAP 2. I am now looking to get a job as a trainee mortgage advisor but there doesn't seem to be many positions available, which is understandable in the current climate. I am now considering applying for some trainee IFA positions as these seem more readily available. I see that Halifax for one are offering such roles throughout the UK. Ideally I'll like a position in Northern Ireland but I'm currently based in Leeds.

Please can anyone advise me if it would make more sense for me to try and take up an IFA role. Which job do people believe has the better prospects, both in the short- and long-term?

Also, who are the best companies to approach regarding trainee positions?

I would be very very grateful for any help as this is a big decision for me and my future.

Many thanks!

dunstonh

I am now considering applying for some trainee IFA positions as these seem more readily available.

There is as a number are getting out or reducing their authorisations to just mortgage. Plus the average age for an IFA is quite a lot higher. I'm in my mid 30s and considered a youngster in IFA terms.

I see that Halifax for one are offering such roles throughout the UK.

Halfax sell their own products. They are not IFAs. Are you aware of the difference between an IFA and FA?

Please can anyone advise me if it would make more sense for me to try and take up an IFA role. Which job do people believe has the better prospects, both in the short- and long-term?

Long term the IFA wins hands down. Short term no difference as both require you to have clients. However, IFA is much the steeper in learning curve and qualification requirements. It is going to get harder as well as the FSA have proposed that a higher qualification for IFAs (and not FAs) will come into force from 2009. That would mean about 10 more exams after cemap.

Also, who are the best companies to approach regarding trainee positions?

Realistically, you are better off doing time as a tied agent first. To go from no experience to IFA is one hell of a jump. Many advisers cannot cope with the jump from FA to IFA let alone straight to IFA.

A tied agent will have about 8-15 products and upto around 20 funds available. An IFA will have about 38,000 products and funds available. The licensing is a little different too as well as the liability. IFAs have to recommend everything and cannot use the "you chose" that the tied agents have available.

DerryBoy_2

Thanks dunstonh for all the information. Apologies - I meant to state Financial Advisor not Independent! I think its excellent that people like yourself take the time to help people like myself out. Again, many thanks!

dunstonh

As you mean FA, then you need to be aware of the pitfalls as well as advantages.

A bank tied agent is a good place to start a career. However, working in a bank selling products you know are naff is not a good working environment. Its a necessary evil for success though as you get to learn the role and you get customers handed to you on a plate (most of whom wouldnt have a clue if product was brilliant or rubbish). YOu also get to make your mistakes on bank customers with no liability to yourself.

After a few years with a tied salesforce you will typically start to feel one of two things if you are successful. 1) comfortable and brainwashed or 2) restricted, fed up and wanting more for your life. Some people like a salesforce environment and if they get a good branch they can be comfortable earning a relatively small amount of around £35k a year with pension and benefits and customers handed to them on a plate. The fed up ones will look to more than that and look for IFA. However, that doesnt mean you will start earning over £100k straight away. It will take years of hard work, more training and to be honest a bit of luck. Once you are there though it the benefits are massive.

Do not look at adverts saying you could earn xyz. Most new advisers dont get near those figures. Companies will give you examples of their top earners as "what you could earn". A new recruit is unlikely to get a good branch. They tend to go the longer serving advisers who have proved their worth. The sales managers arent going to risk an inexperienced newbie in a branch that may account for a good chunk of their bonuses.

The industry is fragmenting into two groups and this is partly natural progression and partly FSA enforced (look up retail distribution review if you fancy reading up on the future). One is salesforce with even more limited products and funds. The other is proper financial advice with advice being the thing paid for rather than the product. Earnings are likely to go down on the salesforce side and up on the advice side. Banks will almost certainly be able to get more staff authorised and regulated and may not even need financial advisers. In which case you could get left behind if you dont set a career path and timetable.

DerryBoy_2

Thanks again dunstonh. I really just want to get my foot in the door at the moment and gain some good experience. I am going to start applying for some FA jobs, starting with Halifax. Do you know what other banks/building societies regularly recruit trainees?

I am in the meantime going to complete my CeMAP as I think that the more qualified I am the better position I'll be to be able to adapt to how the market develops. All this information from people like yourself really is invaluable so cheers!

dunstonh

Do you know what other banks/building societies regularly recruit trainees?

Most of them. The banks suffer a high turnover of staff in general. However, they will be looking for sales ability.

shuey

Hi dunstonh

Would you be able to recommend best route to becoming an IFA (as opposed to a FA) with no experience within the industry but strong sales background and financial degree in Actuarial Science?

thanks for any tips

Shuey

dunstonh

shuey wrote: »

Hi dunstonh

Would you be able to recommend best route to becoming an IFA (as opposed to a FA) with no experience within the industry but strong sales background and financial degree in Actuarial Science?

thanks for any tips

Shuey

Going straight to IFA is hard. I have known tied agents who have gone IFA and then back to tied agent again because they couldnt handle the extra work. Quite a lot at the moment are considering dumping their IFA status and becoming mortgage advisers as they dont think they will pass the new exam standards.

Doing 12-24 months as a tied agent may be living hell but at least it means you learn the role in stages with a limited product range and clients given to you.

The other way of doing it is to train to be a mortgage adviser first at an IFA firm and then move on to IFA as you do the job. Problem is that most, if not all, will want you to have Cemap first.

You will not be allowed to set yourself up as an IFA sole trader until you have experience. So, you are going to have to be attached to a firm for at least 12 months and have competent adviser status.

TEDDYRUKSPIN

Unfortunately, all financial institutions would like all applicants to have full qualifications before applying (i.e. unless you already work for one). These institutions are trying to save money on education costs and due to the new RDR legislation coming in (still criteria not set), you are on a very long road.

Cemap is pointless if you are planning to be an FA.

First thing first, you need to get some sales experience and preferentially in the banking sector. You have a very long learning curve as you will need to obtain CAS and then really get some good evaluations to get to IFA level.

Good luck.

Dunstonh, word is going around that 2 modules for all advisors will need to be taking - even if you hold AFPC. The FSA do not believe even level 4 is enough.

My answer: - Laugh at loud. Not even the top execs hold Cefa.

Conrad

dunstonh wrote: »

Long term the IFA wins hands down. Short term no difference as both require you to have clients.

Well I came from the FA background, but personally found being a complex finance arranger more satisfying. I earned £150k after expenses in good years and I know plenty of IFA's on a lot less.

In the end it depends on the commodity value prospective clients deem you worth. If you're a MA that merely checks rate tables and administers the application, then you are unlikely to offer a high value to any client afterall most people can very simply work out the best buys using the net. If on the other hand you are presented say with a complex commerical bridging deal and prepared to put in a lot of work, then your value can be high.

Brokers like actors and builders can make a lot of money or next to nothing. You cannot learn to be a good broker, you either have the right mindset or you don't. Like being a chef really - they can all learn the same recipe's yet there is a vast difference in carrer outcomes.

Financial_Engineer

shuey wrote: »

Hi dunstonh

Would you be able to recommend best route to becoming an IFA (as opposed to a FA) with no experience within the industry but strong sales background and financial degree in Actuarial Science?

thanks for any tips

Shuey

If I had a degree in Actuarial Science & had a strong sales background, I'd consider joining the higher end Wealth Management Firms such as Fisher Wealth that focus on HNW clients with liquid net worth of £250,000 and above or join IFA departments of the larger Accountancy & Legal firms. Following the typical IFA route would be too boring for you. I have friends who are actuaries and every time we discuss financial planning, they get themselves bogged down with the technical calculations such that they lose the plot. From my last discussions with them, they still don't have adequate cover & their retirement plans are flawed (remember these guys designed endowment plans)