What credentials should a financial adviser possess?

General advice 27 November 2014

Before you meet with an financial adviser, the first thing you should do is ensure that they’re properly qualified. In order to offer professional-standard advice on a wide range of financial topics, financial advisers need to gain certain qualifications.

Depending on the area your financial adviser chooses to specialise in, they may gain these qualifications from a number of professional bodies. The Financial Conduct Authority (FCA) only recognises financial advisers who have attained qualification from bodies on their appropriate examinations list.

Most qualifications are graded from level 1 to level 8 by the Qualifications and Credit Framework – indicating how advanced an financial adviser is. From 2013, FAs had to achieve a QCF level 4 or above to be recognised by the FCA. Qualifications level 5 and above indicate advanced studies up to level 8, which is equivalent to a PHD.

As of January 2013, financial advisers who sell investment products, securities or derivatives are also required to hold a current ‘Statement of Professional Standing’. This indicates that they have completed at least 35 hours of professional training each year, to ensure that they are up to date with new regulation and changes in the industry. A Statement of Professional Standing (SPS) should be renewed every year, so you should make sure that your adviser possesses a current certificate.

Finding a qualified financial adviser

The FCA hosts the Financial Services Register, a searchable database of authorised and regulated financial advisers. If your financial adviser does not appear on this database, you might want to question their credentials.

At Local Financial Advice we only work with fully qualified, FCA-regulated financial advisers, so you can use our service with confidence that you’ll be provided with the highest standard of financial guidance. Financial advisers should also be happy to show evidence of their qualifications on request.

Professional bodies

This is a list of some of the major professional bodies who offer training and qualification for financial advisers. This list is not exhaustive, and your financial adviser may have received training from another recognised body. If in doubt, always refer back to the FCA Financial Services Register.

Chartered Insurance Institute (CII) – The world’s largest professional body dedicated to insurance and financial services, covering all disciplines within the insurance industry (claims, broking, underwriting and sales), those working in the life and pensions sector, the mortgage advice market and personal finance.

Personal Finance Society (PFS) – A part of the CII dedicated to the personal finance industry.

Institute of Financial Services (IFS) – The professional body of ifs University College, a London-based registered charity, incorporated by Royal Charter. It supports and promotes professionalism in the financial services industry through the provision of benchmark regulated adviser qualifications and through its membership, alumni and continuing professional development services.

Chartered Institute of Bankers – A member-led organisation, representing qualified bankers and those working towards their professional qualifications.

CFA Society of the UK (CFA UK) – Part of the worldwide network of member societies of the CFA Institute, a global not-for-profit association of investment professionals. CFA is the awarding body for the Investment Management Certificate, the UK’s leading entry level qualification for investment professionals.

Chartered Institute for Securities and Investment (CISI) – The largest professional body for individuals and groups working in the securities and investment industry in the UK.

Institute of Financial Planning (IFP) – An independent professional body appointed by the FCA to issue statements of professional standing (SPS) to members who meet the requirements.

Pensions Management Institute (PMI) – The UK’s leading professional body for establishing, maintaining and improving professional standards in the areas of pension scheme management, consultancy and trusteeship.

Scottish Qualification Authority (SQA) – A professional body that works with the Scottish government to award a range of accreditations and qualifications, including diplomas in professional financial advice.

The importance of working with a qualified financial adviser

Managing your finances in an ever-changing market can be a complicated business. Making the wrong decisions could have a devastating effect on your resources now and in the future. Only a qualified, FCA-regulated financial adviser can offer expert advice based on a careful analysis of your needs and circumstances.

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