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Financial Adviser

Financial Adviser

Tell me about it
Financial advisers work with clients to find financial products that suit their needs. A client could be one person, an organisation or a group of individuals. The sorts of products they give advice on may include investments, life insurance and critical illness cover, pensions and savings plans, mortgages and other borrowings, secured and unsecured.

There are two quite distinct types of financial adviser:

  • They may be tied to an individual bank, building society or insurance company, advising solely on the financial products of that organisation
  • They may have a broader role as an independent adviser, recommending suitable investments, mortgages, pensions and insurance policies on an impartial basis.

When they have identified a product that is appropriate, financial advisers need to explain all the details clearly, with the minimum of jargon. They need to point out the potential benefits and any limitations so that the client can make an informed decision.

A completely independent financial adviser charges clients by the hour in the same way as an accountant, while a tied adviser may offer advice free of charge, earning commission on the financial products he or she promotes and sells.

The Financial Services Authority (FSA) has recently undertaken a review of the sector (the Retail Distribution Review or RDR) and plans to make many changes by 2012, including a proposed change to the job titles that financial advisers use.

Entry level
While there are no formal academic entry requirements, the most prestigious employers would require a high standard of education. Many financial advisers are graduates. A degree in finance and accountancy, business studies or related subjects may be an advantage, but a confident, professional character is just as important. Clients look for maturity in their adviser, so school leavers are rarely employed directly into this role.

Entry to a degree is with at least two A levels and five GCSEs (A*-C), or equivalent qualifications.

Making the grade
As a trainee, you would have to undertake industry-recognised training that meets standards set by the Financial Skills Partnership and is regulated by the FSA. This is likely to take between two and three years and it is necessary to pass examinations in order to become fully qualified. Various professional qualifications are available, including those offered by the Chartered Insurance Institute, the Institute of Financial Services (ifs) School of Finance, the Chartered Institute for Securities and Investment, the Institute of Financial Planning (SQA/Calibrand), and the Chartered Banker Institute.

Under the FSA changes mentioned above, all financial advisers will need to achieve a level 4 diploma by the end of 2012.

Most employers provide training and pay for exams, but you would usually be expected to study outside working hours, with many courses offering distance learning opportunities. To pass the examinations, you would need to show a good understanding of the financial services sector and to be able to share this knowledge with clients.

Younger financial advisers tend to start as tied consultants. As they gain experience, they may join a firm of independent financial advisers, or go into business by themselves. If you are enthusiastic, can make clients feel comfortable and have good product knowledge, you can progress quickly.

Personal qualities
As a financial adviser, you would need to be capable of understanding financial products, which may be complex, yet able to communicate the benefits of these products simply.

You must be a clear and concise communicator, with good listening and questioning skills, you must be numerate and comfortable using computers, and you must be able to inspire trust. You would normally be expected to dress smartly and conventionally for this type of work.

Looking ahead
Financial advisers can work anywhere in the UK, although the opportunities are mostly centred on the major cities and the suburbs. Although tied advisers may be on the payroll of a bank or insurance company, a significant proportion of financial advisers are self-employed.

Financial advice is an area undergoing rapid change. The sector has had some bad publicity in recent years but its image has changed with tighter regulation, greater transparency and the introduction of compulsory training. This process will intensify with the introduction of the RDR proposals in 2012.

Alternative suggestions
Other possibilities might include accountant, banker, insurance broker or investment analyst.

Take-home pay
This can vary considerably.  Your method of payment could range from a full salary to a salary with bonuses for achieved targets, to commission only or fees only.  So, to a certain extent, what you earn would be up to you. As a graduate, you could expect to earn £21,000 to £26,000 in your first year and considerably more later if you exceed your targets. You could achieve very high earnings as an experienced and successful independent adviser, but remember that a high proportion of your earnings will be performance based. Under the RDR proposals, all commission will be scrapped from 2012, with fees either charged upfront or taken from the investment.

Advisers' hours of work are often dictated by the availability of clients. If you deal with larger organisations or are a tied adviser, you would normally work office hours. Otherwise, you would have to arrange meetings when it suits clients, and could expect to work in the evenings and occasional weekends.

Sources of information
Financial Skills Partnership:  
Personal Finance Society:
Association of Independent Financial Advisers:
Institute of Financial Planning:
Chartered Banker Institute: 
Chartered Insurance Institute:

Ifs School of Finance:

Chartered Institute for Securities and Investment:   

Chartered Financial Analyst Society of the UK:




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