Understanding independent financial adviser qualifications

Understanding independent financial adviser qualifications; how to get an adviser who’s qualified

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Financial adviser qualifications are something of an alphabet soup and many of them sound very similar. But while some qualifications show that an adviser is an expert in their field, others only show they’ve passed the minimum threshold exam. What’s the difference?

Understanding independent financial adviser qualifications

You don’t have to know off by heart all the different qualifications that an adviser might have passed before you can work out whether or not they’re capable of giving you good financial advice (thankfully!). But it’s probably useful to be aware of some of the acronyms that may follow their name.

Minimum qualifications

All financial advisers have to be qualified before they can advise you about your money, although many have a higher level of qualification. Currently there are dozens of qualifications that a financial adviser can hold, awarded by over half a dozen different bodies. But not all will show that the adviser will have the knowledge or expertise you’re looking for.

I wouldn’t recommend that you go to an independent financial adviser who only holds basic qualifications. Instead choose one who’s made an effort to get more qualifications than the minimum.

The qualifications are graded according to the Qualifications and Credit Framework (QCF).

  • QCF Level 4: this is the minimum level of qualification. It’s the equivalent to a first year of a degree. This isn’t the name of the qualification that a financial adviser may have as a number of qualifications meet the QCF Level 4 threshold. These include Level 4 Diploma for Financial Advisers (Dip FA), and the Diploma in Regulated Financial Planning. The key thing to ask, and which your financial adviser should volunteer, is that the qualifications they hold meet QCF Level 4 or above.

SAVVY TIP: Before 2013, financial advisers only had to be qualified to QCF level 3, which is equivalent to ‘A’ level. is called the Certificate of Financial Planning (Cert FP) and if the adviser hasn’t taken that he or she has to have taken an equivalent exam such as the Certificate for Financial Advisers (CeFA) or the Financial Planning Certificate (FPC).

Additional qualifications for specific areas

In order to give advice on certain specific areas (such as long-term care, occupational pensions and equity release), the financial adviser has to have passed additional exams specific to that subject.

Here are some examples:

  • Equity Release: An adviser has to have a certificate in regulated equity release.
  • Mortgages: An adviser must have a certificate in mortgage advice and practice (which is a Level 3 qualification) but could have a diploma in mortgage advice and practice (Level 4).
  • Occupational pensions: Certificate in Pension Calculations (Level 4).

SAVVY TIP: If you’re trying to get advice about a specific area of your finances, ask the adviser what qualifications they hold and how that compares to the minimum level they must hold, as set by the regulator.

Qualification to look out for include:

  • Diploma in financial planning (DipPFS) or its predecessor the AFPC or the Advanced Financial Planning Certificate.
  • Chartered Financial Planners have an Advanced Diploma in Financial Planning and five years’ industry experience.
  • Certified Financial Planners, who should have CFP after their name, have to take ongoing exams, charge a fee and take a holistic approach to advice. There are several thousand Certified Financial Planners in the UK.

SAVVY TIP: You can find a financial adviser by searching on a website called Unbiased and can select advisers with specific qualifications. There’s guidance on the site about whether qualifications are threshold level or higher. Alternatively, you can search for a Certified Financial Planner at the Institute of Financial Planning website.

Questions to ask before choosing an adviser

Knowing that the adviser is up to the job is only part of the picture. You don’t use a financial adviser to be sold something; you use them for their expertise. That means they have to listen – and I mean really listen – to what you say. If the adviser is at all evasive to the following questions, don’t reward them by becoming a client:

  1. What qualifications do they hold and how does it compare to the minimum levels set by the regulator?
  2. Are they equivalent to an academic qualification, and if so, what?
  3. What did they have to do to get this qualification?
  4. Do they do any ongoing exams or training?

Don’t forget that a financial adviser has to be registered and authorised by the Financial Conduct Authority. If you want to find out whether your financial adviser is registered you can check the register on the FCA’s website.

Useful links: You can find a list of financial advisers that support SavvyWoman on the directory pages.

Related articles:

Female financial advisers; are you better off taking advice about your finances from a woman?

Financial advisers can no longer be paid by commission for investment advice

A guide to investing for beginners; understanding your investment choices

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