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How to become a Financial Planner in 2021 (Career Advice from a Chartered Financial Planner) - YouTube
Channel: Martin Bamford
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if you want to become a financial
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planner in 2021
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this video is especially for you i get
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this question on a regular basis loads
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of emails each month from blog readers
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podcast listeners and youtube viewers
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who are all keen to start their career
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in financial planning
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in this video i've pulled together the
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main things and the three steps you need
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to think about
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if this is something that you're
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interested in doing before i get into
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the steps you need to consider i have to
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say it is a fantastic career it really
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is
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there is a relatively small number of
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financial planners in the uk
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combined with a large and rising demand
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for advice
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that's because more of the post-war baby
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boom generation are reaching retirement
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age
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and they've got their accumulated
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pension property and investment wealth
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at the same time there's this
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opportunity to serve younger investors
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including
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entrepreneurs and young professionals
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who need coaching
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and guidance to build a long-term
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financial plan and also to avoid
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potentially disastrous
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investment decisions the money is good
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according to the recruiter read the
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average financial advisor salary in the
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uk is 70
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000 pounds a year but in reality the sky
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is the limit
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the more fee income you generate for
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your employer the more you'll get paid
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a good rule of thumb is a salary of a
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third of your generated fees
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bring in say half a million pounds a
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year of fee income into a financial
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planning business
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and it's realistic to expect to be paid
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a hundred and sixty 000 pounds a year
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i know several financial planners who
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earn significantly more
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than top city lawyers but of course it's
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not all about the money financial
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planning
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is a career option where you can
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genuinely help people you help clients
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avoid mistakes
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put in place valuable protection should
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the worst happen
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understand the best decisions to make
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during stressful times
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it's an incredibly privileged position
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where you get to know people
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and their personal circumstances goals
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and objectives your clients will grow to
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trust
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the advice you give them with all of
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that in mind how do you become a
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financial planner in 2021
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the main routes into the profession back
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in the day when i got started around 20
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years ago
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were through insurance companies or
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banks i started as what's called a
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broker consultant for two large
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insurance companies
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effectively acting as a technical
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salesperson selling products from those
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insurance companies
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through financial advisors other
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financial planners i know today got
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started working at banks
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selling investment pension and
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protection products to bank customers
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while gaining valuable experience in the
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process sadly these entry points to the
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profession are in very
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short supply today if you want to become
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a financial planner in 2021
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you probably need to find another way in
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so step number one in most cases
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is to get yourself into a financial
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planning business in any capacity
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and then work your way up to the
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position of financial planner i have to
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be a little bit careful when i use that
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term work your way up in this respect
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because the roles of administrator and
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power planner
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within the financial planning profession
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are incredibly valuable
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it's a bit like a three-legged stool
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remove the administrator
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power planner or financial planner from
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the business and the store would just
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fall over but assuming that you're not
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a qualified and experienced financial
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planner already this is where you're
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going to need to start
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you need to learn your trade and there's
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no better way of getting experience than
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being within the business itself
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learning from those with years of
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experience even decades of experience in
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some cases
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please be clear with your prospective
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employer that you have got ambitions to
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become a financial planner
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that might well put some bosses off as
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they're looking to recruit someone
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that's prepared to stay in that
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administration
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or trainee power planning role for a
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long time but others will relish the
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opportunity to grow their own talent
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to mold a financial planner in the image
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of themselves perhaps even creating
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their own
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future succession plan step number two
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is to get yourself qualified
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since the end of 2012 the minimum
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qualification requirement for
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a financial advisor in the uk is
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equivalent to a diploma level or
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rqf level 4 equivalent to the first year
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of an undergraduate university degree
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the qualification that we see most
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commonly comes from the chartered
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insurance institute the cii
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and it's called the diploma in regulated
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financial planning this is from the
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cii's website
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the rqf level 4 diploma in regulated
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financial planning meets the fca's
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qualification requirements
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for retail investment advisors
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developing core
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technical knowledge and financial
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planning capabilities across six
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core areas this exam this qualification
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requires an average of
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hours of study although that amount will
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vary depending on any prior knowledge
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you've got
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and how quickly you're able to grasp the
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various subjects
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there are six exam units to complete
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they're called financial services
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regulation and ethics
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that was pretty dull but it provides a
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very important foundation for the rest
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of your study
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there's investment principles and risk
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personal taxation
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pensions and retirement planning
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financial protection
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and then financial planning practice
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with the exception of that last exam
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module which brings together all of your
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knowledge from studying the other
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modules
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the exams are multiple choice format the
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first two exams are two hours long each
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they've got 100 multiple choice
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questions each
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and a notional pass mark of 65 the next
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three
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are each one hour exams with 50 multiple
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choice questions and then that final
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module financial planning practice is a
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three-hour exam
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with two written case studies all about
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financial planning practice
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you get those case studies a couple of
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weeks ahead of the exam so you've got
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some time to prepare
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what you're going to say what your
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answers look like for each exam paper
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between
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six and seven in ten students pass they
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aren't easy
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and the study can be quite involved but
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they're not impossible either
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if you're already in the habit of
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studying for example you've come
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straight out of college or uni
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and you're able to find ways to apply
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the knowledge in real life scenarios
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which is what makes working in a
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financial planning business incredibly
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valuable
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then these exams are certainly doable i
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should point out at this stage that
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other professional bodies are also
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available
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offering different exams and routes to
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becoming qualified as a financial
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advisor
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as an employer i'm quite snobbish when
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it comes to this i probably shouldn't be
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but when i see candidates qualified
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through the chartered insurance
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institute
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i automatically rate them higher than
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those with exams from other institutes
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for example the london institute of
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banking and finance who've got a diploma
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for
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financial advisors it's silly because
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it's subject to exactly the same sanders
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as the cia qualification
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but 20 years of doing this suggests that
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its status isn't quite the same
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apologies if i'm offending any holders
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of the diploma for financial advisors by
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saying that
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it probably goes without saying but i
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should mention it you need to have basic
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math
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skills and the ability to communicate in
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english in writing and also spoken
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english
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don't let the math spirit overwhelm you
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i'm not that great at maths
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software calculators they do a lot of
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the heavy lifting for us as financial
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planners
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nobody's expecting you to be able to
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calculate investment returns
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or tax bills in your head so basic
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understanding
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is absolutely fine step three and
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because becoming a financial planner is
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about so much more than just your
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technical knowledge
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you need to acquire a great deal of
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skills and practical experience
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beyond knowing about pensions
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legislation how investments work
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financial services regulation and
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taxation you need soft skills
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too if you're moving into the financial
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planning profession from another career
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then you might come quite well equipped
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with a lot of these soft skills
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it's the ability to ask good questions
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and listen to the answers
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it's about empathy with individuals who
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are often going through very stressful
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situations
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it's about decision making and
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increasingly it's about the behavioral
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side of finance
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if you need to brush up on these soft
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skills or learn them from scratch
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then that's absolutely fine there is a
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wealth of resources available
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read books seriously if you're not
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already doing so
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commit to reading at least one new book
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a fortnight covering these soft skills
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listen to podcasts watch youtube videos
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absorb this stuff like a sponge
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one of the organizations i really rate
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who are doing some fantastic work in
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this space around soft skill acquisition
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for new financial planners is next gen
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planners
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in fact they offer a training contract
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which is worth checking out
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as it's programmed for new entrants that
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takes you to the level 4 qualification
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level
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and it gives you the skills training
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that you need along the way
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that training covers the skills you need
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to establish empathy
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trust and rapport with new prospects and
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also with clients
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i'll put a link to the next gen planners
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training contracts
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in the description added to soft skills
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i would add the ability to promote
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yourself
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because an essential part of being a
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financial planner is the ability to
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generate leads
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and convert prospective clients into
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engaged clients
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while the financial planning profession
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has moved on a long way from its old
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days of selling products
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it is still a sales role albeit with a
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focus on selling services
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with the products coming much lower down
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in the process you are going to need
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some sales skills too that's it in a
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nutshell three main steps to consider
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one find an entry point into an existing
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financial planning business
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as an administrator or a trainee para
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planner two
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start studying and get your
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qualifications and step three
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acquire the necessary soft skills as
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well one
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closing thought on this subject on this
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question about becoming a financial
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planner
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please go all in this is not a
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profession you can dabble in
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or enter and then take it easy there is
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a huge amount in terms of knowledge and
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skills to acquire
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both initially and then also on an
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ongoing basis
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once approved by an authorized and
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regulated business you have to maintain
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continuing professional development cpd
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each year
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a minimum of 35 hours a year and for
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many advisors
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at least 50 hours a year depending on
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your qualification level
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and which advice areas you cover your
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minimum qualification requirement that
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diploma in regulated financial planning
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that is just a starting point too
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financial planners who are serious about
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their careers
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continue to study they become chartered
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financial planners or they complete the
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cisi
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certified financial planner
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qualification there are tons of
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additional accreditations and
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memberships available out there
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depending on the niche area you choose
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to follow if you're entering the
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profession to sell mortgages or
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protection
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then the bar is a little bit lower in
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terms of qualifications and continuing
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professional development
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but as soon as you want to advise on
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pensions investments
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tax planning just holistic financial
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planning
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then you need to go all in you need to
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take it incredibly seriously
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because after all you're advising people
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about what to do with their money and
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what to do with their life
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and that is a serious business do you
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have any questions about becoming a
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financial planner
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drop them in the comments section below
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and i'll do my very best to answer every
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single one thank you for watching this
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video until next time i'm martin bamford
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and remember when it comes to your money
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the more you know the faster
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it can grow
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