For those with a passion for money, and let’s face it…who hasn’t, but working with the wealthy and ensuring they get the best advice on money management is a privilege, and you have to have the right training, qualifications and mindset to do the job at the best of your professional abilities.
Right now, there’s going to be a huge upsurge in the services, due to change in the FSA regulations. As of January 2013, a certificate in financial planning won’t cut it in the field. You now need a Diploma, so the time of study has increased significantly.
The fee structures IFAs charge have changed, which is expected to see many an IFA leave the industry, who were solely focused on the high paying commissions, leaving room for the people who truly value their profession and offer their clients, upfront, honest and professional advice, that will last a lifetime, adding value to their finances.
The time it takes to become a financial advisor In times past, it would’ve taken you around 6 months to gain your certification in financial planning, which used to be all you needed to become a financial advisor.
That’s why there was so many going into the profession, and making some seriously good salaries by going independent. In total, you’d only have to sit 5 examinations, to work as a financial advisor. However, times have changed and it’s now even more restricted and legislative too. A certificate in financial planning doesn’t hold the same value as it once did.
To become a fully qualified financial advisor, you now need a have gained your Diploma in Financial Planning.
That takes a good deal longer and can see your training time increase up to 2 years to gain your Diploma.
The cost of study is something you will have to take into consideration. In the 2 years that can take you to achieve your Diploma, you could be set back £2’000 easily. There will be financial assistance available to those who need it, but if you’re paying your tuition fees privately, £2’000 is an average of the fees you can expect to be paying.
Of course, if you fail on any of the 9 exams, you will have to retake your course, until you gain your Diploma in financial planning, so studying full-time may be required, so you can put all your effort into your studies.
If you don’t have the money to pay for tuition, and you can’t access government funding to support your training, then what you can do is look for trainee positions within banks and building societies. There’s often roles come up to assist the financial advisors already employed with the organisation, which gives you a couple of benefits.
1) On The Job Training
You get the training from the company you work for, giving you on-the-job real life experience, and you might even have the opportunity to shadow a qualified financial advisor. That will give you a more thorough understanding of the job roles, and the responsibilities you’ll be taking on, once you’re qualified.
2) Your tuition is paid for you
When you’re in work as an assistant, the financial organisation that employs you as a trainee will also help you to further your career, and help you study to gain the necessary qualifications needed to become a financial assistant working for them.
To get started in the field, you are best to approach employment with organisations to start with, regardless if it’s as a trainee or a position as a tied financial advisor. If you come fresh out your training, and decide to try your hand at going independent, as an IFA, you’re going to be facing some high costs for professional indemnity insurance, not to mention the thousands of pounds that it will cost in levy fees to the FSA, the Financial Services Compensations Scheme, and the Financial Ombudsman as well.
The added advantage you have of being in employment, as opposed to self-employment is that the advice you give out, you aren’t going to be liable for compensation years after you’ve given it. The bank/building society is legally responsible for you.
You get the training, and the protection, which could be a huge burden to you later, even after you stop trading independently. You’re held accountable for a life-time, so 20 years after offering advice, a client could make a claim against you, which means once you start trading as an IFA, you always need professional indemnity insurance, in place. Training to become a financial advisor is certainly worth the time, and a couple of grand really isn’t much in comparison to the salary of a financial advisor.
If you really do you feel you could benefit people by advising on the best financial actions, they can take to build their wealth, or manage budgets, then working as a financial advisor could be the best career for you.