Thinking of doing the CII Diploma of Regulated Financial Planning?

by Adam on March 17, 2014, no comments

Give your plan some wiggle room.

plan

You might need it!

 

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Adam

This post was written by Adam, a Financial Services Apprentice (and aspiring financial planner) based in York, UK. Read more here. To follow his progress just put your name and email in the boxes below and join the Financial Planning Academy




Making Connections in the World of Finance

by Adam on March 17, 2014, no comments

I’m finding my journey to become a financial advisor a little lonely at times.

I know I want to be a financial planner and have plenty of internal motivation to keep me moving forward, but I’m always on the look out for others on a similar path.

When I was starting and growing my first financial blog, Magical Penny, back in 2010 I found lots of other bloggers wanting to talk with me, share stories and reply to emails. I definitely felt a part of a financial blogger community. The friendships I made back then even inspired me to head over to America to FINCON12, the financial blogger conference in Denver in September 2012.

It was this conference that first sowed the seeds in my mind about taking my financial planning interests to a whole new level: when I began considering professional qualifications to become an advisor. I was already writing about money and investing but I wasn’t able to legitimately advise people (and at that time I didn’t know how much I didn’t know).

Getting qualified would demonstrate my knowledge and allow me to do much more than just write about money. I could actually help people with their financial affairs.

Contacting IFAs

pensions

After a few months of contemplation on this change of career I took any further action by writing to a handful of IFAs for advice and support in April 2013. IFAs seem to be very busy people as I didn’t hear much but eventually one IFA got back to me and offered his time for a chat (thanks so much Darren!). Darren told me about the Chartered Institute of Insurance (CII) that provided the industry standard Level 4 qualification, the Diploma in Regulated Financial Planning. I was surprised to not have come across the CII in all my online research but perhaps I had missed it as I never did any searching on the topic of insurance! Incidentally, the CII also runs the Personal Finance Society (PFS)…both the CII and PFS have near identical branding and websites. I ordered the books and began revising in earnest, but going through the content alone, with no tuition or mentor to talk with, it got pretty lonely. Fast.

Using Social Media to network

Naturally I searched online to find others doing the same exams. Simply googling came up with nothing current, so I turned to social media, notably Instagram and Twitter as I could search by various hashtags: #R01 (the code of my first exam), #R02, #R03, and so on. This was moderately successful at first as I found a couple of fellow students studying the same texts. We exchanged a few words, wishing each other luck but Instagram is not very conducive to discussion.

Worse still, one of my fellow students seemed to give up after failing R02, the Investment exam. Thankfully I passed R02 on my first attempt but it was a shame I couldn’t enjoy the success with my new instagram friends. tax law Twitter also held some promise, and I befriended a few young paraplanners, although I’ve not managed to deepen any relationships or have too much of a discussion.

Having not completed many exams and without a full-time job in the industry I still feel very much as an outsider.

Real-World Meetups

With my internet search proving fruitless, I searched for real-life connections, and came across the York chapter of the CII. It’s run by a friendly local financial planner, Stephen Wilkinson, who welcomed me to the group and I appreciate his efforts putting together the meetings. I have attended a handful of meetups with various themes including social media as a business tool, and the impact of flooding. I’m looking forward to the next one on Pension planning in a couple of weeks.

However, so far, the number of financial planners who attend the meetings has been minimal (or at least I haven’t had a chance to meet many): Aside from Steve himself, I’ve only met retired advisers and insurance professionals (less relevant to the IFA field I’m looking to join). And I’ve been consistently the youngest person in the room by quite a margin. I would need to look further afield.

I continued my search and recently came across the Financial Planning Institute. By searching through the events calendar, I found the Leeds chapter who meet most months for a meeting, run by financial planner Murray McEwan. As luck would have it, they were meeting just a few days after I searched for events. Normally to attend you have to be a member of the Institute.  I’m already paying for member of the CII for discounts on my CII Diploma in Regulated Financial Planning exams, so I wasn’t too excited about paying for another professional membership at this stage as I’m self-funding my career change until I find a company to take me on. Fortunately though, I don’t have to become a member just yet. Anyone can attend a couple of meetings for free, and then non-members pay £20 per session.

The meetup was a lively discussion about cash-flow modelling. But best of all, it was brilliant to hear actual financial planners talking passionately about this stuff. In fact there were more financial advisers and planners in one room than I had ever seen before in my life! As the discussions were taking place I couldn’t help but think that this was exactly the kind of community I’ve been searching for since I came back from my American Fincon trip in 2012.

The meeting also gave me ideas and inspiration for where I should be sending speculative CVs and letters in my quest to get a job at an IFA firm in or around the Leeds/York area.

All in all, it was an excellent day.

Now it’s just a small matter of getting through more of the RO exams to move ever closer to becoming an IFA.

Back to the books!

 

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Can you add anything to this? Be sure to join the discussion by leaving a comment below this post.

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Adam

This post was written by Adam, a Financial Services Apprentice (and aspiring financial planner) based in York, UK. Read more here. To follow his progress just put your name and email in the boxes below and join the Financial Planning Academy




Taxation of Trusts

by Adam on February 18, 2014, no comments

One area I haven’t fully grasped yet as I prepare for R03 is the taxation of trusts.

Below are some notes:

Inheritance Tax may have to be paid on a person’s estate (their money and possessions) when they die. It’s only due if the estate is worth more than the threshold of £325,000.

Inheritance Tax is due at 40% on anything above the threshold of £325,000 – but there’s a reduced rate of 36% if the person’s will leaves more than 10% of their estate to charity.

Inheritance Tax can also apply when you’re alive if you transfer some of your estate into a trust.

When Inheritance Tax is due

The main situations when Inheritance Tax is due are:

  • when assets are transferred into a trust
  • when a trust reaches a 10-year anniversary of when it was set up (there are 10-yearly Inheritance Tax charges)
  • when assets are transferred out of a trust (known as ‘exit charges’) or the trust ends
  • when someone dies and a trust is involved when sorting out their estate

What you pay Inheritance Tax on

You pay Inheritance Tax on ‘relevant property’ – assets like money, shares, houses or land. This includes the assets in most trusts.

There are some occasions where you may not have to pay Inheritance Tax – for example where the trust contains excluded property.

Special rules

Some types of trust are treated differently for Inheritance Tax purposes.

Bare trusts

These are where the assets in a trust are held in the name of a trustee but go directly to the beneficiary, who has a right to both the assets and income of the trust.

Transfers into a bare trust may also be exempt from Inheritance Tax, as long as the person making the transfer survives for 7 years after making the transfer.

Income tax*

Beneficiary taxable at own tax rates unless an unmarried** minor child of the settlor, in which case the settlor is liable where income exceeds £100 per annum.

Capital gains tax (CGT)

Beneficiary taxable at 18% or 28% and full annual exempt amount available.

Inheritance tax (IHT)#

Gift into trust is a potentially exempt transfer (PET). Assets are treated as inside the beneficiary’s estate for IHT purposes.

 

Interest in possession trusts

 

These are trusts where the beneficiary is entitled to trust income as it’s produced – this is called their ‘interest in possession’.

Income tax*

Trustees taxable at either 10% (dividend) or 20% (interest) depending on the nature of the income. Beneficiary entitled to reclaim tax on interest where they suffer a lower rate but not on dividends. Higher rate taxpaying beneficiary will have additional tax to pay.

Capital gains tax (CGT)

Trustees taxable at 28% on trust disposals and a maximum of half the annual exempt amount.

Trusts annual exempt amount is split between number of trusts (excluding bare trusts) established by settlor to minimum of £1,090 per trust for 2013/14.

Inheritance tax (IHT)#

Gift## into trust is a chargeable lifetime transfer (CLT). Periodic and exit charges will also apply to the trustees. Settlement will generally benefit from its own full nil-rate band (NRB) at 10-year point.

Tax is payable at entry at one half of the death rates, 20%. Where the settlor pays tax, the gift is grossed up resulting in a tax rate of 25%. Tax is due on the element of the gift which is above the settlor’s available nil-rate band.

On assets transferred into this type of trust before 22 March 2006, there’s no Inheritance Tax to pay.

On assets transferred on or after 22 March 2006, the 10-yearly Inheritance Tax charge may be due.

During the life of the trust there’s no Inheritance Tax to pay as long as the asset stays in the trust and remains the ‘interest’ of the beneficiary.

Between 22 March 2006 and 5 October 2008:

  • beneficiaries of an interest in possession trust could pass on their interest in possession to other beneficiaries, like their children
  • this was called making a ‘transitional serial interest’
  • there’s no Inheritance Tax to pay in this situation

From 5 October 2008:

  • beneficiaries of an interest in possession trust can’t pass their interest on as a transitional serial interest
  • if an interest is transferred after this date there may be a charge of 20% and a 10-yearly Inheritance Tax charge will be payable unless it’s a disabled trust

If you inherit an interest in possession trust from someone who has died, there’s no Inheritance Tax at the 10-year anniversary. Instead, 40% tax will be due when you die.

If the trust is set up by a will

Someone might ask that some or all of their assets are put into a trust. This is called a ‘will trust’.

The personal representative of the deceased person has to make sure that the trust is properly set up with all taxes paid, and the trustees make sure that Inheritance Tax is paid on any future charges.

If the deceased transferred assets into a trust before they died

If you’re valuing the estate of someone who has died, you’ll need to find out whether they made any transfers in the 7 years before they died. If they did, and they paid 20% Inheritance Tax, you’ll need to pay an extra 20% from the estate.

Even if no Inheritance Tax was due on the transfer, you still have to add its value to the person’s estate when you’re valuing it for Inheritance Tax purposes.

Trusts for bereaved minors

A bereaved minor is a person under 18 who has lost at least 1 parent or step-parent. Where a trust is set up for a bereaved minor, there are no Inheritance Tax charges if:

  • the assets in the trust are set aside just for bereaved minor
  • they become fully entitled to the assets by the age of 18

A trust for a bereaved young person can also be set up as an 18 to 25 trust – the 10-yearly charges don’t apply. However, the main differences are:

  • the beneficiary must become fully entitled to the assets in the trust by the age of 25
  • when the beneficiary is aged between 18 and 25, Inheritance Tax exit charges may apply

Trusts for disabled beneficiaries

There’s no 10-yearly charge or exit charge on this type of trust as long as the asset stays in the trust and remains the ‘interest’ of the beneficiary.

You also don’t have to pay Inheritance Tax on the transfer of assets into a trust for a disabled person as long as the person making the transfer survives for 7 years after making the transfer.

Paying Inheritance Tax

You pay Inheritance Tax using form IHT100. You can get the form and instructions to complete it on the HMRC website.

If you’re valuing the estate of someone who’s died, you may have to value other assets apart from trusts to see if Inheritance Tax is due.

Types of trust and tax implications

Bare trusts With a bare trust each beneficiary has an immediate right to both capital and income

Interest in possession trusts With interest in possession trusts, beneficiaries have a right to all trust income

Discretionary or accumulation trusts Discretionary trust trustees choose whether to pay out trust income, accumulation trust trustees re-invest income

Income tax*

The trustees are liable to any income tax arising. The trust has basic rate band of £1,000 within which tax is payable at 10% or 20%. (£1,000 split between number of trusts (except bare trusts) established by settlor to a minimum of £200.)

Above this band income is taxable at 45% or 37.5% depending on source (tax deducted at source can be offset) as 2013/14 tax year. Where dividend income is distributed to beneficiaries this will be classed as trust income, not dividend income. Beneficiaries may reclaim any overpaid tax at their own rates.

Capital gains tax (CGT)

Trustees taxable at 28% on disposals and maximum of half the annual exempt amount.

Trusts annual exempt amount is split between number of trusts (excluding bare trusts) established by settlor to minimum of £1,090 per trust for 2013/14.

Inheritance tax (IHT)**

Gift## into trust is a CLT. Periodic and exit charges will also apply to the trustee. Settlement will generally benefit from its own full NRB at 10-year point.

Tax is payable at entry at one half of the death rates, 20%. Where the settlor pays tax, the gift is grossed up resulting in a tax rate of 25%. Tax is due on the element of the gift which is above the settlor’s available nil-rate band.

Mixed trusts Mixed trusts combine different types of trusts

Settlor-interested trusts The ‘settlor’ who puts assets into a trust can continue to benefit from those assets

Parental trusts for children Special tax rules for trusts set up by parents for unmarried children below the age of 18

Non-resident trusts UK trusts may be set up or managed by people living abroad

Trusts for vulnerable people Special tax rules for trusts set up for disabled people or children who have lost a paren

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Can you add anything to this? Be sure to join the discussion by leaving a comment below this post.

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Adam

This post was written by Adam, a Financial Services Apprentice (and aspiring financial planner) based in York, UK. Read more here. To follow his progress just put your name and email in the boxes below and join the Financial Planning Academy




Progress Update for my journey completing the CII Regulated Diploma in Financial Planning

by Adam on February 6, 2014, no comments

updateI haven’t been very active on this site over the last few months.

Who would have guessed how much goes into preparing for financial services exams?!

I had intended to use this site as a diary to share my experiences of going through the process but I didn’t commit to it enough, perhaps in part because of a feeling of guilt that this site would be a form of procrastination instead of using my time to work through the content of the RO exams.

Studying R0 exams CIIPassing R01 Financial services, regulation & ethics

The short version of the first part of my journey is I passed R01 in June 2013, after 2 months of revision during evenings and weekends.

On a cloudy and unusually cold morning in June, clutching hastily scribbled revision notes, I nervously boarded a train from my home station of York heading to Hull. You can do the CII exams at a number of different test centres but the one in York is at Full Sutton Prison which is quite far out of York which is difficult without access to to a car, so I opted for the exam centre at Hull College.

My mission that morning was simple:

  1. To locate Hull College
  2. Find the examination room in time
  3. Pass my first ever financial exam, R01 Financial services, regulation & ethics

Steps 1 and 2 were easily achieved with mobile phone sat-nav, and asking for directions but the third step required a little more work.

The CII estimate it takes 60 hours of study to prepare a candidate for the exam. I’m afraid I didn’t track the amount of time I studied for but for about 5 or 6 weeks the big blue study text book rarely left my hands.

The objective of the unit is to develop knowledge and understanding of the financial services industry, including regulation, legislation and the Code of Ethics. This meant learning countless facts about tax law and financial products. It was through reading the textbook that I discovered how much I didn’t know, but I made it through the exam on my first attempt.

The feeling of relief was amazing and passing first time gave me a lot of confidence for the other exams.

Passing R01

Moments after passing R01 In June 2013

Passing R02 Investment Principles and Risk

I didn’t start revising for R02 straight away after passing R01 because I wanted to wait for the new text book issued in July 2013. If I had ordered the text book straight away in June I would only have had until the end of August to pass the exam before the syllabus changed. I didn’t think there would be too many changes to the content but I didn’t want to risk it so gave myself a month off study and enjoyed the summer with my girlfriend.

Finally the big blue R02 book arrived, just in time for my trip to Barcelona!

Taking a break

Barcelona with my girlfriend, taking a break from studying for my Diploma in Regulated Financial Planning

Truth be told I didn’t open the book many times on holiday but it was oddly comforting knowing I had the book with me! After getting back I spent most of September doing a bit of reading and revising every day and booked the exam for October 2013. I was nervous from reading accounts of multiple failures by other students.

The R02 text book had lots of formulae and figures that had to be memorised for the exam. Whilst it was a little daunting, the actual content was really interesting, considerably more so than the content from R01 which at times seemed like a never-ending list of changing regulations through the years.

It was my curiosity in investing that made me start this journey in the first place so it was great to read more about the details that I’d missed with my limited experience of index funds and ISAs.

Studying R02

This wasn’t part of the plan…

How breaking my foot helped me pass R02

September 2013 was also eventful because I badly broke my foot and had to have an operation on it! I even brought my RO2 book to hospital to read!

I wasn’t able to get around much for several months but at least I could still study!

For the exam I opted for a taxi ride to York’s examination centre at Full Sutton, as I was on crutches and didn’t fancy trying to make the journey to Hull. And, to my great relief (and surprise) I passed the exam.

One of the main challenges in the exam is getting through the questions in time. For the last 10 questions I only had 10 minutes to complete. I was working out questions until the very last second. So imagine my relief when the exam ended and a little pop-up appeared on screen saying I had passed R02!

Apart from the pain of my broken foot I was feeling on top of the world. I knew studying for this CII Diploma of Regulated Financial Planning was going to be a lot of work but I was relieved to prove to myself that I was academically capable of passing challenging exams on a first attempt.

Learning about tax R03 CIIFailing R03 Personal Taxation

You could say I was cocky after passing R02 on my first attempt. I had been quite nervous going in, and yet when I got my final breakdown I had done much better than just scraping by with a pass. I ordered my next big blue book that would dominate my life and when it arrived I booked the R03 exam.

I had expected R03 Personal Taxation to require much less study-time because it’s only a 10 credit unit compared with R01 and R02 which are both 20 credit units. But I was wrong.

 

Whilst the study text was a little cheaper, it is just as thick as R02 and the content requires a lot of in-depth study and careful revision.

 

Like R02 there are quite a few calculations to be learnt and memorised, as well as the complex rules about inheritance tax and direct/indirect investments.

Calculations

I once again travelled to the York examination centre and sat the exam,  but I didn’t have the same luck as I had for R02, and when the time was up I saw that I had failed it. I picked up my crutches and hobbled out, dejected.

I didn’t know the margin that I had failed by but I was sure I would pass on a second attempt which I booked a week later. But once again I failed. I later found out I was one mark away from passing.

R03 would require a lot more work than I had initially thought.

 

 

 

Moving onto R04 Pensions and Retirement Planning

It was now December 2013, and I couldn’t face the thought of reading that Tax book over Christmas so I decided to press on to R04 to the topic of pensions and retirement planning. As I had enjoyed learning in more detail about investments in R02, I was confident I would find the content of R04 just as interesting, and I had a little more time over Christmas to dig into the content.

R04 fun at Christmas

Christmas fun

I was reading through the pension book slowly but soon it was January 2014 and the month came and went in a blink of an eye.

Truth-be-told, I felt a little stalled on my journey to become Level 4 qualified, and the CII examination body must have been reading my mind when this email arrived in my inbox:

CII email

I had made some decent progress into R04 but R03 was haunting me and after some contemplation I decided to return to R03.

It’s time to pass this exam.

UPDATE: I’m delighted to announce I passed R03! You can read about passing R03 here

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Can you add anything to this? Be sure to join the discussion by leaving a comment below this post.

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Adam

This post was written by Adam, a Financial Services Apprentice (and aspiring financial planner) based in York, UK. Read more here. To follow his progress just put your name and email in the boxes below and join the Financial Planning Academy




How Much Does It Cost For A Diploma In Regulated Financial Planning?

by Adam on April 8, 2013, no comments

cost of CII Financial Planning Diploma

Qualifying as a Financial Advisor isn’t cheap. But, in a age of ever increasingly costly university fees, the costs are not completely outlandish, either.

I have opted to study for the CII Diploma in Regulated Financial Planning so based on my research the minimum cost for this qualification is £1344. Other courses have slightly different fees but they appear to be comparable.

How the £1344 Cost breaks down:

  • CII Annual Membership Fee (Ordinary Member): £70
  • Exam Costs for the 6 modules (assuming CCI membership): £559
  • Course Handbooks: £715

To break down these costs further, each of the 6 modules have slightly different costs:

Diploma Exam Costs (£) (CII Members)
RO1 RO2 R03 RO4 RO5 RO6
£113 £113 £68 £68 £62 £135

(Non CII Members pay considerably more so it’s worth becoming a member for £70 per year)

Then there are the course study texts which will be needed at an absolute minimum:

Diploma Study Texts (£) (CII Members)
RO1 RO2 R03 RO4 RO5 RO6
£99 £99 £60 £60 £35 £99

There are lots of optional additional costs too, such as revision aids, and even revision workshops that I could attend, for about £400 a module.

Diploma Revision Days (£)
RO1 RO2 R03 RO4 RO5 RO6
£425 £450 £475 £350 £350 £350

Costs from Reed Business School

Making the Numbers Work

As I’m likely to self-fund this process I think I’ll try to skip the revision days, and aim to pass the exams with self-study of the Study Text alone. However, if my attempt at RO1 isn’t successful, I’ll might need to reconsider this approach and purchase some study aids for each module such as audio revision guides; examination guides; key facts booklets; and question packs. Time will tell.

Taking The First Step – Looking over Mock Exam Paper

I found a copy of the mock questions for the RO1 exam and am looking forward to studying them further to get an understanding of what is involved. From speaking with financial advisors they suggest each module could be done in 6 weeks if I am bright and focus my mind on it, so once I’ve received this past paper I’ll be able to move forward with the qualification and see if I can pass the first module in that time frame.

And I had better hurry! The RO1 exam is subject to substantial changes for those sitting the exam in September 2013 (changes revealed in July 2013).

The financial services industry certainly doesn’t sit still!

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Can you add anything to this? Be sure to join the discussion by leaving a comment below this post.

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Adam

This post was written by Adam, a Financial Services Apprentice (and aspiring financial planner) based in York, UK. Read more here. To follow his progress just put your name and email in the boxes below and join the Financial Planning Academy




Sunday Introspection

by Adam on April 7, 2013, no comments

This website is special, because I’m working out my life, in real-time. Thank you for joining me as I share this.

IFA York

 

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Adam

This post was written by Adam, a Financial Services Apprentice (and aspiring financial planner) based in York, UK. Read more here. To follow his progress just put your name and email in the boxes below and join the Financial Planning Academy




Deciding to Study the CII Regulated Diploma in Financial Planning

by Adam on April 6, 2013, no comments

ifa york

From speaking with Independent Financial Advisors yesterday, I learned that achieving the necessary qualifications should be my first priority.

To become a financial advisor in 2013 and beyond, you must reach the industry benchmarch QCF qualification level 4. This is a higher level of education and knowledge than was required before 2013, before the Retail Distribution Review (DRD) came into effect.

Whilst there are more qualifications to achieve now, this is a great opportunity to get into the industry as many older financial advisors have decided to leave the industry to save themselves the trouble of passing new exams.

There are a few different examination bodies that provide qualifications to this DRD-compliant level 4 including:

 

The third option above from CII is one of the most popular qualifications and this is one recommended to me by financial advisors I’ve spoken with.

The Diploma consists of 6 modules to develop ‘core technical knowledge and financial planning capabilities’. Once these qualifications are completed I could work for a Financial Advising Firm, be shadowed for a few months, and once signed off as ‘competent’ I would become a IFA.

The 6 modules of the Regulated Diploma in Financial Planning are as follows:

R01 – Financial Services, Regulation, Ethics

This module focuses on the main types of financial products, the FSA and other regulatory bodies, the rules financial advisors need to follow, and ethical frameworks. From my conversations with IFAs yesterday I was warned not to let this module put me off as it is the most boring to revise for! But regulations are important so I can understand why this is first on the agenda.

R02 – Investment Principles and Risk

This module is concerned with the technical knowledge of an advisor. It covers the characteristics of different investments, some macroeconomics and theories concerning risk and return. I imagine I will have already picked up quite a lot of this knowledge from my own independent learning but it will be interesting to see how it is presented in module form.

R03 – Personal Taxation

This module concerns all personal taxes from income tax to national insurance to capital gains. This module should fill what I think is my biggest knowledge gap when it comes to financial information. I’m looking forward to demystifying this area.

R04 – Pensions and Retirement planning

This module covers pensions, trusts and other relevant retirement planning topics at an overview level. I think this one will be the most fun and ultimately rewarding module as it deals with the bread and butter of most IFA jobs…retirement planning!

R05 – Financial Protection

Financial protection means insurance, and this module picks up from R01 and goes into more detail surrounding different types of insurance and how an advisor should approach recommendations. Insurance is another area where my current knowledge is lacking. It’s also an arean where I feel consumers are even more clueless and have been ripped off in the past, so I’m intrigued how this content will be presented.

R06 – Financial Planning Practise

This is the largest of the modules, and tests your practical application of all the above to actual case studies. This is a whollistic summary module which requires R01-R05 as assumed knowledge.

How Long Will It Take?

If I focused  solely on achieving this qualification it’s technically possible to revise and sit each module in 6 weeks, so that’s 36 weeks of intensive study. Meaning I could be qualified in as little as 9 months. This is possible because five of the six units are multiple-choice tested and therefore examined year-round in 80 exam centres. The sixth, the planning unit R06, is examined 4 times a year.

This might be a little ambitious though and depends on which route I’ll take to begin these qualifications. I certainly feel it’s worth a shot though. I’ll know more about my capabilities once I have attempted the first module.

Technically once I have passed the first module, Financial services, regulation and ethics, I would be authorised to advise under supervision while I work towards completion of the full Diploma, but that assumes I can find a firm who would be willing to work with me, which may be a difficult ask.

One fun thing of completing this qualification will be adding more letters after my name (DipPFS).

Have you done these exams before? I’d love to hear what you think of the different examining bodies and if there’s anything I should consider before taking this first step. Leave a comment below!

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Can you add anything to this? Be sure to join the discussion by leaving a comment below this post.

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Adam

This post was written by Adam, a Financial Services Apprentice (and aspiring financial planner) based in York, UK. Read more here. To follow his progress just put your name and email in the boxes below and join the Financial Planning Academy




Day One – Deciding to become a Financial Advisor

by Adam on April 5, 2013, no comments

Independent Financial Advisor York

Today I made a commitment to myself to become a professional Independent Financial Advisor in the UK.

My goal is to build a meaningful and fulfilling career, helping people get more out of life through good money management and growth.  This site will chronicle my journey into making this dream a reality.

A Short History

I’ve been interested in investing since early adulthood. I didn’t have any money to save or invest but that didn’t stop me dreaming of growing my savings in the stock market.

After graduating from University I saved almost all of my meagre earnings from a summer job to make my first investments. By the time I had done my research and accumulated enough to invest it was October 2007. Yes, indeed, the height of the market before the ‘Credit Crunch’ had really begun to unfold.

Every month after that sunny October day when I had begun my investing journey I would see the numbers on my computer screen fall as the world went into what seemed to be a financial meltdown. But being a student of the markets I knew not to worry and kept buying every month, all the way to the bottom in March 2009, and back up again.

As the numbers started recovering and growing I enjoyed telling my friends about my adventures in the stock market and in 2010 I decided to spread my message further with a personal finance website, Magical Penny.

I passionately believe everyone should be investing at some level or another, and the internet has opened up a host of opportunities to get started and manage a portfolio at low cost.

But not everyone has the time, patience, aptitude or drive for DIY investing. And many others have lofty goals and complex lives that require more in-depth knowledge and attention.

I want to help these people, so after 3 years of writing and growing Magical Penny, I feel it’s time to take my knowledge further and become a qualified Independent Financial Advisor.

This site will follow my journey so welcome.

Beginning the Process

For my first foray into the world of professional financial advising I decided to line up some work experience to get a feel for the day-to-day realities of the job, as well as learning about the process I will need to go through to become qualifed.

With this in mind, today I spoke with some financial advisors for the first time, Darren and Stefan at NHA Financial Management in York. It was incredibly enlightening talking for 90 minutes about how we could help each other grow. I’m immensely grateful to them for taking time out of their day to talk with me.

One of the most useful things they told me was about the specific examination requirements I would need to reach to begin my career. There are quite a few qualifications that get an advisor to the required ‘QCF Level 4’ needed to sell but I wanted to learn what Darren and Stefan would recommend.

The benchmark qualification for financial advisers

The qualification recommended to me was the CII Diploma in Regulated Financial Planning.
(UPDATE: I have decided to pursue this – click here)

This is the benchmark qualification for those advising on retail investment products and importantly it meets the QCF Level 4 exam standards in full. Although I have been writing about personal finance and investing for a few years I don’t have any qualifications which makes this particular diploma suitable for me.

If you have other relevant qualifications like a degree in Finance you may be able to add credits to a slightly different qualification: the Diploma in Financial Planning.

Whilst some larger firms can foot the bill for these qualifications, small IFA firms are unlike to have the capacity to fund them, so at this point in time I think self-funding them would be my best option. It would give me flexibility and time to pass the 6 modules needed to get qualified without commitments that may come with working for a large investment firm.

A busy first day in the industry!

Do get in touch if you are a financial advisor or going through the process. Leave a comment or email me at Adam@MagicalPenny.com

 

 

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Can you add anything to this? Be sure to join the discussion by leaving a comment below this post.

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Adam

This post was written by Adam, a Financial Services Apprentice (and aspiring financial planner) based in York, UK. Read more here. To follow his progress just put your name and email in the boxes below and join the Financial Planning Academy