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How to become a financial adviser

A step-by-step guide to qualifying as an IFA

How to be an IFA

If Unbiased has opened up your eyes to the world of financial advice, you may wonder if there could be a career in it for you. Helping people from all walks of life to make some of their biggest decisions can be a rewarding and varied profession, with no two days quite the same. However it’s also a big responsibility, with a lot depending on your skill, insight and hard work on your clients’ behalf.

Here we’ll take you through the key steps involved in training to be a financial adviser, along with their key responsibilities and the main qualities required for the role.

What does a financial adviser do?

Financial advisers help clients make both big and small financial decisions with confidence, by explaining the pros and cons of each course of action and what decisions will involve. Their advice covers a range of individual areas including savings, pensions, investments, mortgages, other loans, insurance, tax affairs, estate planning and more, but is usually goal-based. That is, as well as advising on the technical aspects of each financial product, the adviser must also enable their client to understand how it relates to their own life goals.

Some financial advisers specialize in a limited selection of product types (e.g. just pensions and investments), while others are able to advice on a full range of them.

Day to day, financial advisers:

  • Advise on financial considerations during major life changes, such as getting married, having a child or retiring
  • Research and recommend financial products to clients
  • Educate clients about the risks and opportunities offered by different products
  • Discuss with clients how arrangements are performing and meeting their needs/goals

Independent financial advisers (IFAs) are able to give recommendations and advice on products from any provider. ‘Tied’ or ‘restricted’ providers can only advise on products from a limited selection of providers. This kind of adviser cannot advertise through Unbiased.

How much do financial advisers earn?

The average well-qualified IFA with a number of years of experience behind them could expect to earn around £90,000. Entry-level jobs such as paraplanners and junior advisers may start at around £30,000. Bear in mind that a significant amount of a financial adviser’s total earnings may be in the form of bonuses, which may fall in years during which business performance dips.

What skills do you need as a financial adviser?

As well as having excellent knowledge of financial products and principles to planning (which you will gain as you take the various qualifications), you need to have some more general skills to succeed in the role. These include:

  • Approachability – you will be discussing sensitive matters, which can be difficult for people especially if they are going through a tough time such as divorce. Having a warm and open approach will help people be unguarded with you.
     
  • Good listening skills – often, clients won’t be forthcoming with information. You may need to read between the lines and know the right questions to ask. Sometimes, they simply don’t realise that telling you how many children they have, for example, is important for their financial planning. It is your job to find this out by listening to every detail.
     
  • Objectivity – clients are turning to you for an objective, unbiased view of their finances and the best way to achieve their goals.
     
  • Reliability – by being responsive, reliable and honest, you will build trust with your clients for a long-lasting relationship.
     
  • Writing skills – although financial advice is a numbers game, you will need to write reports for clients. These should be well written, in easy-to-understand language, to ensure clients fully understand the advice you are giving.

What qualifications do you need to become a financial adviser?

Financial advice is a regulated profession. As a result, you need qualifications that meet the Financial Conduct Authority’s (FCA) criteria. There are a few routes for this.

You could complete a degree that will enable you to get a role in a financial services company. But you don’t need a degree to become a financial adviser. Instead, you could get one of the following qualifications:

  • Diploma for Financial Advisers (DiPFA) at level 4 – this is offered by The London Institute of Banking & Finance and is a popular route
  • Diploma in Regulated Financial Planning at level 4 – this is offered by the Chartered Insurance Institute
  • Investment Advice Diploma at level 4 – this is offered by the Chartered Institute for Securities & Investment

There are a huge range of specialist financial adviser qualifications too, which you can view on our Qualifications page.

Some financial advisers go a step further and work to become chartered. To gain chartership status, you need to complete one of the above qualifications, which you can usually do alongside work.

Another route to becoming a financial adviser is through an apprenticeship at a firm, where you’ll learn the skills on the job. You could also get a job in a financial services company, such as an insurance firm or a bank, and do a qualification in a few years’ time. 

How much does it cost to get a financial advice qualification?

You can expect to pay around £1,000 to do your qualification. Bear in mind that you might need to pay more for additional study resources and any exam retakes. Your employer may pay these fees for you depending on your role and career progression plan.

How long will it take to become a financial adviser?

The DiPFA qualification takes on average nine months to complete. Depending on your previous experience and whether or not you have a related degree, you could land a financial adviser role straight away after completing the course. However, if you’ve never worked in financial services, you’ll likely need to build up some experience first by doing other roles, such as in customer service or administration for a financial firm.

Can I become a self-employed financial adviser?

The ability to be self-employed is one of the advantages of the financial adviser career, so a great many IFAs are self-employed. Others may work in small firms of as few as two people, for a similar feeling of professional freedom. However, it’s usually worth cutting your teeth in a larger firm first, both to gain experience and attract a client list who may choose to stay with you when you go it alone.

You should be sure to put professional indemnity insurance in place. Even advice that’s expertly given may cause a client to lose a significant amount of money, in certain unfortunate circumstances. Even if you’re blameless, a client may try to blame you, so you’ll need to be able to fight your case in court – and your insurance can pay for these costs.

Your next step is to find clients. Ideally, in time, you’ll get lots of referrals to keep business coming in, but to reach that stage, you’ll need to put in legwork first. You could register yourself on a site like this one, attend events and use social media to find leads. It also helps to network with other advisers with different specialisms who can recommend your services. 

One last tip: never forget that the work you do is regulated. Stay up to date with the latest regulations and keep on top of industry best practice. Continuing professional development (CPD) is the standard way of describing the ongoing training that keeps even experienced advisers in an ongoing learning process.

About the author
Nick Green
Nick Green
Nick Green is a financial journalist writing for Unbiased.co.uk, the site that has helped over 10 million people find financial, business and legal advice. Nick has been writing professionally on money and business topics for over 15 years, and has previously written for leading accountancy firms PKF and BDO.

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