To quit my cushy but frustrating job to be a financial advisor!?

[Useruser1]

Has anyone done similar and can share their experiences?

I currently do 4 days in an engineering firm, it's OK but now I'm 40 it's increasingly boring and frustrating work.

I love the idea of being an IFA, helping clients and being my own boss... where my reward is an outcome of my efforts.

But I have stability, decent income and sick cover etc.

Aaah!
AIBU: You have a nice job you should stick with
AINBU: Take the plunge and set out on a new journey

You’ve got over 20 years of working left so make the change.

Have you got any of the necessary qualifications and expertise to be a financial advisor?

As an IFA it's a good job, financially sound.

But lots of exams to qualify, have you considered that?

Hard to say without knowing how much relevant experience you have both of the financial field and being an independent/self-starting sole worker who can sell and build their own client-base. The first thing i'd want from an IFA is a good track record/lots of experience, so this feels like a long-term journey, not an easy switch. Is it something you can study for on your days off and build up to or does it have to be a big leap from something to nothing and starting from scratch?

Wow, Ive never heard of anyone thinking being an IFA was an exciting job choice! do you have the right qualifications? You’ll need to be accredited, and where will you find your clients?

as someone who has just swapped being self employed for a stable job, I would say it’s great working for yourself - the freedom, the independence, the autonomy. But I dont think people with jobs realise what it’s like to have NO annual leave, NO sick leave, NO pension provision etc. you need to factor in at least 30% of your income for tax, NI and pension (obviously much more if you’re paying the higher rate of tax).

is there a middle step? Part time in each while you build up your business?

Also it would be more typical to work for several years as a financial advisor in a firm, building up track record, before going self employed.

@Useruser1 yes the point about being self employed, where would you get clients from?

Retired IFA here. I was chartered which is the gold standard.

It used to be a great job but no more. Nearly all IFAs are no longer "IFA"s due to regulatory and liability issues. I used to really enjoy selecting the right funds and tax wrappers for clients but gradually my autonomy was eroded and we were only allowed to choose from a selection of pre-approved funds or put the clients directly into set fund models.

Virtually no IFA (if any) now works independently. If you do, you carry the liability for the advice you give to the grave and beyond so even if you retire you have to maintain your liability til your death. Dead IFAs have had their estates sued for compensation. All now work for companies that now take the financial responsibility for what with the benefit of hindsight was poor advice. Given how quickly policy U turns are made, it is not an inconsiderable risk.

The supporting paperwork for each client is onerous and time consuming. Clients simply can't see the wood for the trees but compliance requires it. If you make a mistake then you can be in trouble very quickly.

Sales targets are high. There is no time to spend with unprofitable clients. The days when you could offer to do a bit of off the clock help for someone are gone. Even that now has to be documented to the nth degree.

You will have plenty of exams to take even for a base level qualification. If you want to specialise then it's more and harder papers. A base level of CPD covering a wide variety of forms needs to be undertaken and documented. The more interesting and challenging work such as pension transfers requires a high level of qualifications.

Isn't IFA fundamentally a sales job? You will have to be aware of commission, products, which products are best for you to sell etc. When you haven't done sales it's hard to understand how self-starting you have to be. You have to be pushy and persuasive when people want to decide later or put it off for a few months: it's not very often about finding people with plenty of money the perfect product. If nobody buys your time is all wasted. You have to be tough in a way that working in engineering doesn't prepare you for. Agree with the poster who said try it on the side for a bit.

Cross posted with @Elphame who has actual knowledge!

It's not a fakes job, it's an advisory role.

Commission is no longer paid, it's fee based.

And how are your Sales, Marketing and Networking skills?
IFA is largely a Sales Role

Still a sales role.
Who can you advise if you have no clients?
Even if someone sends you clients (unlikely) you will have to sell to them. Its not double glazing but it IS Sales

Exactly what I did 18 years ago. Absolutely LOVE it.

Best thing I ever did with my work.

DM me and I can offer you some insight.

You are talking about a tied sales rep's job not an IFA's.

Just bear in mind that there are a shed load of exams to pass.

@

@Hoppinggreen it's not a sales role....

You are engaging of a service, like a mechanic, it's not sales!

"It used to be a great job but no more. Nearly all IFAs are no longer "IFA"s due to regulatory and liability issues. I used to really enjoy selecting the right funds and tax wrappers for clients but gradually my autonomy was eroded and we were only allowed to choose from a selection of pre-approved funds or put the clients directly into set fund models."

That doesn't sound like a true IFA though...if you can only pick from certain pre-approved platforms, provider, wraps and/or funds, you sound as though you were more a 'tied' agent.

I'm a para planner but IFA qualified. I pick funds, platforms, providers etc after completing individual research for our clients.

OP how will you start out? As a tied agent whereby you can only recommend products from one (or limited few) providers? Or as a self employed, one man band IFA? The fees for the latter are eye wateringly extortionate!! Tens of thousands of £££ need to be spent just so you can 'open the door' to your office. You'll need the minimum of a diploma (level 4 qual) to get started and that will cos a few thousand, depending if you use the CII or slightly less for other governing bodies recognised qualifications.

The horrible, time consuming red tape that goes with the job is pain staking. The FCA decide to change things on a whim (it seems). The latest emporers new clothes is 'consumer duty' which, a lot (not all) is just the same as 'treating customers fairly regurgated.

Good luck with it if you choose to go ahead but it'll cost you a lot, it takes a long time to build a client bank (that will end up being your annual income from their servicing fees), and the stress of upkeeping an office is tough!! Sorry if I sound negative but I've been in the business 40 years and seen so many IFAs fold.

Total rubbish 😂

I solve problems, I don’t have to be pushy as I have never ever sold anything to anyone that didn’t recognise something as a solution to an issue they had.

I am fee only. People pay for my time so I get paid for the work I do NOT the products.

Yes it's now pretty much all fee based which is good and bad. It means that only people who can afford the fees can get access to personalised advice and good advice is expensive. I was charging £250 per hour 10 years ago.

At least with commission, it did mean that the less wealthy could have access to qualified advisers. One of the reasons I left was having to turn away people with modest savings or pension pots because I was required to charge them fees which they couldn't afford. Even 5 minutes basic guidance which would have helped was not allowed due to compliance and insurance conditions.

Even now, if you go online for help, the websites all say they do not offer individual advice even if you think they should. I am now considering whether to take my own pension benefits and the sites you are directed to to help with decision making all carry this disclaimer.

People are effectively being forced to make their own decisions about their financial affairs for which many are badly equipped. I'm not the least bit surprised with the recent press reports that people are running out of money in retirement thanks to drawdown. It was entirely foreseeable.

Have you done it?
I have and so has the other poster who says its a Sales role.
I have also worked with many many Financial Advisors in several capacities and I am very confident about what skills are needed.
It IS possible to be a Paraplanner, which is I suppose your equivalent mechanic but thats not an IFA

Problem is I don't trust anyone to give me advice because there are so many scammers. How do you know who actually knows what they're talking about? It seems like a lot of the financial regulators are always being sued or fined for something as well, so I don't trust that someone is backed by xyz company because they usually turn out to have been misselling or worse.

@Hoppinggreen have I done it.....

Only for the past 30 years!

I'm not sure how you relate a paraplanner to a mechanic?

It's a fee based advisory role.

@greenpolarbear I think you'll be safe with a chartered IFA, or do it yourself and make a mess.

I just realised, the reason we’re seeing financial “coaches” is because presumably those people don’t have qualifications?