Any IFA's in?

[marsred]

Or in the Job forum?
I'm deciding which path to take in financial services, been in the indusry for about 11 years and its about time I decided which bit of it I went with for the next 40. Anyhow, wondered what IFA's thought of their jobs? The industry is going through some major changes but to me that is the best time to get in IMO, also there will always be a need for good advice. Would you recomend being an IFA? How did you go about getting into it etc etc? Cheers

[john_r]

marsred said:

Or in the Job forum?
I'm deciding which path to take in financial services, been in the indusry for about 11 years and its about time I decided which bit of it I went with for the next 40. Anyhow, wondered what IFA's thought of their jobs? The industry is going through some major changes but to me that is the best time to get in IMO, also there will always be a need for good advice. Would you recomend being an IFA? How did you go about getting into it etc etc? Cheers

A friend of mine has been made redundant as an IFA twice in the last 2 years.

I guess if you can get a core set of lucrative wealth clients then it can be rewarding, but if like most IFA's you have to deal with 'Mr/Mrs Mortgage, Kids and Car Loan' then it's a tough job and very sensitive to a downturn...

[marsred]

Yes i've seen the same happen to IFA's myself. I'm looking to start the studying process with a longer term view to moving in the advice direction (and i'm looking at wealth management and planning rather than mortgage and stakeholder products for Mr& Mrs Average). Now wouldn't be the best time to be looking for the work but it probably is a good time to start studying.

[scotal]

What do you do Lloyd?

[marsred]

Without knowing what you do:
What's your take on the RDR's affect on the IFA industry?
Its this i'm most interested to know from an adviser's view before making any moves as it will either be a significant shake up or something and nothing.
TBH I think it will be a bigger deal for the product providers than the advisers though.

[Jespin]

The RDR is going to happen in some form or another, some of it is bound to be altered though as in its current form it will heavily restrict access to financial advice to the less affluent masses. What RDR will do though is raise the quality and regulation of advisers which is long overdue. IFAs have long wished to be viewed as a profession but without wanting to demonstrate their competence in the same way as a lawyer / accountant etc has to.

The main problem with RDR is that financial advice has typically been paid for by commission which the FSA would like to banish. This would be fine for the wealthiest 5% who are happy to / already are paying by fee. The vast majority either are not willing or not able to pay for an adviser's advice upfront and trying to enforce this in the future will drive people away from taking advice. Fortunately, there is no provision for this in the RDR but only because this would cause bigger problems for bancassurers than for IFAs. Being as the FSA are run by ex-bank chiefs and are bankrolled by the big banks they will be hugely reluctant to do this.

It is arguably a fantastic time to get into the industry if you are flexible and willing to adapt to a role that is constantly evolving. The average age of an IFA is currently 54 and many will be unwilling to undergo the necessary exams to enable them to continue to advise beyond 2012. Younger advisers will find themselves in a strong position to take over the client banks of these advisers whether they choose to leave in 2012 or at a later date.

[marsred]

haworthlloyd1 said:

marsred said:

Without knowing what you do:
What's your take on the RDR's affect on the IFA industry?
Its this i'm most interested to know from an adviser's view before making any moves as it will either be a significant shake up or something and nothing.
TBH I think it will be a bigger deal for the product providers than the advisers though.

marsred im involved in that area of work but don't like talking about it on open forums

the RDR is a fantastic opportunity and the best thing to happen for ages. There are too many 'advisers' that aren't qualified or have just done some multiple choice exams and it doesn't do the profession any good at all.

anyone with the entry level exams shouldn't be allowed to advise in my opinion - they don't know the essentials needed.

the rdr will get rid of the dead wood, get rid of the older end of advisers and get rid of the salesmen that give poor advice. I think therefore it will leave more qualified IFAs who are more prepared to study and get qualified and therefore do the profession a world of good, leave the remaining advisers to earn more money and hopefully get the profession a bit more respect.

become chartered and the money can be good.

I know doctors, solicitors, teachers and accountants and the earning potential for them isn't anywhere near as good for the effort they put in.

I have heard of 23 year olds with the basic exams earning £300,000 per year.

Now a doctor would still be studying, a solicitor still doing their training contract earning £25k per year and an accountant still studying.

Your opinion is appreciated haworthlloyd1 and I wouldn't want to discuss my position on here either (I wasn't fishing for details, just not sure if you were in a position to answer my question).

I'd agree with what you say and its these reasons that i see the area as a good one to be getting into now. It certainly needed a shake up and if the trust hadn't gone from the industry (provider and adviser) pre 2008 then it has now.

We can only hope too much damage hasn't been done already in terms of trust in the industry. When I heard Tesco were planning on opening 30+ bank branches in stores my immediate reaction was that they would be hugely succesful as "people" trust their supermarket whereas they don't trust their banks. I suspect the same is largely true of pension providers, fund managers and those who advised them to put their money their.

Perhaps Tesco Value IFA and Tesco Extra Special IFA is the way to go?!

[Bigel]

Hello!

I have to admit, I've also been looking at changing careers to something in this field. I've been working in recruitment for the last 7 years and want something whereby I'm actually using the grey matter a bit more / in a more professional career/industry. Being self employed in the long term is a plus point too. I'd be happy (and have the cash) to do any / all necessary exams including the chartered (although as I read it, it helps if you have experience when doing this?) and it looks like the best first step would be the FPC (1,2&3) exams which I'll get cracking on initially. I'd be interested in the thoughts of the pistonheads masses though, and what you think the best route would be?

[Jespin]

The FPCs are no longer available, there are a range of CF exams to be sat now instead. They're still multiple choice though so are fairly straightforward. See www.ci.co.uk for more info. You could get through these exams fairly quickly as they can be sat virtually every month. The Diploma units are only sat three times a year so they will take you longer (and cost you more). The Chartered exams will be some time away for someone starting out like yourself. Experience would undoubtedly help but I should imagine that they are passable without as most of the theory is taught.

[marsred]

Jespin said:

See www.cii.co.uk for more info.

EFA

and not EFA in the more usual ironic, PH way, but actually for accuracy

[scotal]

And when looking at qualifications bear in mind that the new level 4 quals that are required for new entrants from next year and all advisors by 2012 have just been questioned by hte FSSC, who've said they arent good enough..... I sense another FSA led debacle.

[Bigel]

scotal said:

And when looking at qualifications bear in mind that the new level 4 quals that are required for new entrants from next year and all advisors by 2012 have just been questioned by hte FSSC, who've said they arent good enough..... I sense another FSA led debacle.

So do you reckon its a case of doing the diploma as soon as possible and get in asap or wait and see what changes they make and do it afterwards to save potentially having to do it twice?

[Bigel]

Thankyou for all this by the way guys!

[scotal]

Bigel said:

scotal said:

And when looking at qualifications bear in mind that the new level 4 quals that are required for new entrants from next year and all advisors by 2012 have just been questioned by hte FSSC, who've said they arent good enough..... I sense another FSA led debacle.

So do you reckon its a case of doing the diploma as soon as possible and get in asap or wait and see what changes they make and do it afterwards to save potentially having to do it twice?

That is a very good question, put it this way I havent put my forms in to do it yet.
BTW if you havent got a job in Fin Services, not all firms will like you to turn up with the quals. Soem prefer it if as a new start you come to them fresh and do their training. You might want to do some homework on that.

[Bigel]

scotal said:

Bigel said:

scotal said:

And when looking at qualifications bear in mind that the new level 4 quals that are required for new entrants from next year and all advisors by 2012 have just been questioned by hte FSSC, who've said they arent good enough..... I sense another FSA led debacle.

So do you reckon its a case of doing the diploma as soon as possible and get in asap or wait and see what changes they make and do it afterwards to save potentially having to do it twice?

That is a very good question, put it this way I havent put my forms in to do it yet.
BTW if you havent got a job in Fin Services, not all firms will like you to turn up with the quals. Soem prefer it if as a new start you come to them fresh and do their training. You might want to do some homework on that.

Hmm, I haven't thought of it that way, I was looking at it more as in if I turned up showing that I'd gone and done it off my own back then it'll save them time / hassle and cost. Saying that, if it saves me a few quid then happy days!

[Jespin]

The majority nowadays, i've found, want someone with Competent Adviser Status. Not many at all are prepared to put a newbie through all of the exams. The ones that do will likely tie you into staying with them for a set period in order to get some degree of return on their investment.

[blueyonder]

haworthlloyd1 said:

well I know morrisons tried banks in supermarkets a while back and it wasn't that successful - a friend of mine helped try implement it.

you may have heard of tesco law with regards a new legal act - perhaps they are diluting themselves and spreading themselves too far.

I dunno - you can think about things too much - there are dwindling numbers of advisers and more people than ever needing good quality advice - its not a bad job. pensions in particular are what people don't seem to fully understand and providing good advice in this area can benefit both yourself and the client.

too many people with annuities when something more flexible such as drawdown would be better - i think if more people knew about drawdown and just exactly how a pension worked then they would be more popular.

good luck!

Would agree....that's why I'm studying JO5 now with a view to sitting the exam in July. It seems that the opportunities for DC schemes to be transferred into more flexible SIPPs to facilitate drawdown/phased is the way forward. Also offering employer sponsored platforms to employess to make it easier for employees to get advice/education in the workplace via intranet/seminarr/webinars e.t.c. to access SIPPs & ISAs following the demise of DB schemes.

Pensions is extremely technical as I am finding out through the study (and I used to be in pensions years ago), it's all different now so can understand how people can easily get confused.

Good quality advice is what's needed for clients, portfolios designed for the client and paid for by a fee....not products sold and influenced by the carrot of high commissions which just encourages poor practices/mis selling.

[Jespin]

That's all fine in theory... i'd love to work solely on a fee-based model but there are not enough clients that would be willing to pay for one. It is not always the case that commission means bias and fees mean impartiality - there are plenty of IFAs that give top notch advice and are still paid by commission, most providers pay similar rates in any case. I'd also guess there are quite a few fee-based advisers whose advice is poor due to their limited knowledge / expertise.

It seems to me that the only people that have a problem with commission are the FSA and the 5% of IFAs that can afford to have a fee-based model due to their more affluent client base. It's very rare that you will find a client who has a problem with commission, providing the job is done right. The thing I do agree with however, is agreeing your remuneration with the client explicitly rather than mentioning it at the end of the process. This has to be good for the professionalism of the industry and for raising awareness of the value of the advice an IFA can give.

[blueyonder]

Jespin said:

That's all fine in theory... i'd love to work solely on a fee-based model but there are not enough clients that would be willing to pay for one. It is not always the case that commission means bias and fees mean impartiality - there are plenty of IFAs that give top notch advice and are still paid by commission, most providers pay similar rates in any case. I'd also guess there are quite a few fee-based advisers whose advice is poor due to their limited knowledge / expertise.

It seems to me that the only people that have a problem with commission are the FSA and the 5% of IFAs that can afford to have a fee-based model due to their more affluent client base. It's very rare that you will find a client who has a problem with commission, providing the job is done right. The thing I do agree with however, is agreeing your remuneration with the client explicitly rather than mentioning it at the end of the process. This has to be good for the professionalism of the industry and for raising awareness of the value of the advice an IFA can give.

If the client knew how much of his initial investment is deducted in the initial charge on a product, including the commission to the IFA, then maybe they would be willing to pay a fee instead which is usually lower than commission. It's known that a lot of IFA's operate a 'panel' of product providers to cover them under 'best advice' rules but the client won't necessarily know that the provider being recommended to the client is the one that pays the IFA the most commission and whose advisers are told to reccommend as 'flavour of the month'. That's the problem with commission...it varies so much from provider to provider for ostensibly the same product and enhanced levels of commission can be paid to IFAs by providers based on volume and how good the relationship is with the IFA. It's not a level playing field and I guess this is where the FSA has a problem and what gets up clients noses. Nearly all my clients object to paying a commission.

Fees are the only transparent way to pay for impartial advice as the cost of the advice is seperated from the investments so there is no bias to one investment over another and the balance between risk & guaranteed investments can be properly maintained. Remember guaranteed investments pay no commissions to advisers so you could have a client overexposed to risk investments as this is the only way the IFA is going to get paid....if the clients is aware of this and they understand that advice is never free then they are happy to pay a fee, then it comes down to the quality of the advice.

I'm not sure that fee based advisers expertise/knowledge is necessarily any more or less limited than an IFAs...everyone has to be supervised and maintain CPD these days so don't think that's an issue.

[Jespin]

All good points, nice to see that you make a success of charging fees regularly. Hopefully as the role progresses and we can be viewed as a profession in the long term, we can all go down this route. I would much prefer it. It would save all the time spent on clients who want to pick your brain and then play you off against either another IFA or the internet.

I guess you are primarily investment / pension based. The fee model still doesn't get around the problem of writing protection business, I cannot see a way in which a client would willingly pay a fee for something that has to be sold to them anyway. Put another barrier in the way of what is already a massive problem with shortfalls in cover in the UK and things will never improve. Further to this, fee-based advice provides good value for clients looking to transact large levels of business but what happens to the client who just wants to invest their ISA allowance? In this case, commission would provide better value as charging a fee would take up a much larger percentage of their investment.

There is a huge amount of cross-subsidy with commission payments at present, writing the larger cases makes the smaller ones financially viable. Take away some of the profit on the larger cases and we effectively shut the door on the majority who should still be able to access advice away from the doors of the dreaded banks. This is why I feel there will be more to come from the FSA regarding the RDR as in its current form it will cause more problems that it solves.