A guide to starting a career in financial planning
Financial planning is a rewarding and dynamic field that offers a range of career opportunities in the UK and beyond. With an aging population, increasing financial literacy, and evolving financial markets, the demand for skilled financial planners is on the rise. This blog provides an overview of what a career in financial planning involves, the qualifications required, career paths, and the benefits of choosing this profession.
What is Financial Planning?
Financial planning involves helping individuals and businesses set financial aims, achieve their financial goals through tailored advice and planning. This includes retirement advice, managing investments, tax planning, mortgage advice, income protection, insurance, estate planning and risk management. Moreover, Financial Planners work closely with clients to understand their financial situations, set goals and create comprehensive financial plans.
Qualifications and Certifications to enter the financial planning sector
In the UK, to become a financial planner, typically you need a combination of formal education, professional qualifications, and relevant experience. Here are the key steps and qualifications:
Formal Education
Many degrees can give you a give a step into financial planning. For example, degrees in finance, economics, business management, accountancy or a related field is often preferred. However, you can enter the financial planning sector with other degrees if supplemented with relevant qualifications.
Apprenticeships
It’s also possible to do apprenticeships in Financial Planning alongside college / degree courses. Apprenticeships are on the rise within many sectors with businesses now receiving funding to help with the costs. As there are many benefits of apprenticeships for both businesses and apprentices and they are a great alternative to full-time post-16 education.
Professional Qualifications
A Financial Planning Administrator is a common entry level role to Financial Planning. It is a great way for industry newcomers to gain knowledge and become familiar with the sector. Such a role provides a great foundation to commence studying towards a Level 4 qualification recognised by the Financial Conduct Authority or another examining body in Financial Advice.
There are different examining bodies that individuals can study through and gain their Level 4 Diploma. Some examining bodies and Level 4 Diplomas include:
Level 4 Investment Advice Diploma (IAD) – This is offered by the Chartered Institute for Securities & Investment (CISI). It provides a grounding in financial services and consumer relationships in the UK, macro-economic environment, settlement, safe custody and prime brokerage, financial protection, exchange traded futures and options.
Level 4 Certificate in Paraplanning – This is offered by the Chartered Institute for Securities & Investment (CISI).
Diploma in Regulated Financial Planning (DipPFS) – This is offered by the Chartered Insurance Institute (CII).
Diploma for Financial Advisers (DipFA) – This is offered by The London Institute of Banking and Finance (LIBF).
The Level 4 Diploma is the minimum level qualification you need to become a financial adviser, as laid down by the Financial Conduct Authority (FCA). It covers key areas such as investment principles, taxation, and retirement planning.
Higher level qualifications
There’re many qualifications that Financial Planners and Advisers can take to enhance their careers. These include:
Level 6 Chartered Financial Planner
Provided by the CII and LIBF, achieving Chartered status demonstrates a higher level of expertise and commitment to professional standards.
CISI Qualifications
The CISI offer many qualifications including:
- Level 6 Certificate in Private Client Investment Advice & Management
- Level 6 in Pension Transfers & Planning Advice
- Level 6 Diploma in Financial Planning
- Level 7 Chartered Wealth Manager Qualification
- Level 7 Certified Financial Planner (CFP) – This qualification is globally recognised and emphasises comprehensive and advanced financial planning skills.
To see the full CISI Financial Planning pathways click here. Alternatively to see the full Investment Advice pathway click here.
Work Experience
Gaining practical work experience through internships or entry-level positions in financial advisory firms is crucial. As many employers look for candidates with hands-on experience in addition to formal qualifications. However, apprenticeships are on the rise within the financial planning sector. Some firms now offer apprenticeships to people straight out of full-time education or to those seeking a career change.
Career Paths in Financial Planning
The financial planning sector offers various rewarding career paths, each with unique opportunities and challenges:
Independent Financial Adviser (IFA)
IFAs provide unbiased advice to clients and can recommend products from the ‘whole of market’. This role offers flexibility and the potential for high earnings. But it also requires the top qualifications within the sector and building and maintaining a client base.
Tied or Multi-tied Adviser
These advisers work for a single financial institution or a limited range of providers. They offer products and advice specific to their employer’s offerings. This path can provide more stability and support compared to being an IFA.
Paraplanner
Paraplanners support financial planners by preparing reports, conducting research and developing financial plans. This role is often ideal for those who prefer a more analytical and less client-facing position. Alternatively, it’s great for people who are building experience whilst studying to become a Chartered Financial Planner.
Wealth Manager
Wealth Managers usually work with high-net-worth individuals and provide a holistic approach to managing their wealth, including investment management, tax planning, and estate planning.
Compliance and Risk Manager
This role has become increasingly important in recent years, as regulations in the financial sector continue to evolve. These professionals ensure that all financial planning practices adhere to legal and regulatory standards.
Financial Planning Administrator
This is an entry point into Financial Planning. In this role you will be supporting Paraplanners, Financial Planners and other team members with administration. It will provide exposure to financial planning work and the day-to-day running of financial planning firms.
Benefits of a Career in Financial Planning
A career in financial planning can be highly rewarding and has many benefits, including:
Job Satisfaction: Helping clients plan for the future and achieve their financial goals can be very rewarding.
Diverse Opportunities: The financial planning sector offers a variety of roles and specialisms, allowing professionals to find their niche and passion.
No two days are the same: Work within financial planning is varied, with each client having different financial backgrounds, requirements and goals. This means that no days will be same and the work will vary day-to-day.
Financial Rewards: Experienced financial planners can earn significant incomes, especially those working with high-net-worth clients or running their own practices.
Continuous Learning: The financial markets and regulations are constantly changing, providing opportunities for continuous learning and professional development.
Challenges and Considerations of a career in Financial Planning
Although working within financial planning has many benefits, it also carries its own set of unique challenges:
Regulatory Changes: The financial services sector and regulations are constantly evolving with external factors playing a huge part to this. In addition, financial markets are also constantly changing, with political and environmental influences impacting the markets. As a result, Financial Planners must stay up-to-date with regulatory changes and ensure compliance. This can be quite demanding.
Building a Client Base: For those starting out, especially as IFAs, building a client base can be challenging and time-consuming. However, not all roles within financial planning involve having your own client base. Some companies have their own client base, which their employees serve.
Ethical Considerations: Financial planners must always act in their clients’ best interests, as you are entrusted with their financial futures. This requires a strong ethical foundation and commitment to professional integrity.
Conclusion
A career in financial planning in the UK is both rewarding and challenging, offering those with an interest in the financial markets a range of career paths and progression opportunities. The financial planning field provides a dynamic professional environment, where you can make a significant impact on clients’ lives whilst enjoying professional growth.
If you’re considering a career in financial planning, start by exploring relevant qualifications and gaining practical experience. Also, explore the different specialisms to find your passion. The journey might be hard work, but the rewards of helping others achieve financial security and success are worth the effort.
Here at the Eventus Recruitment we are specialist recruitment consultants in financial planning. Our Financial planning is headed by Duncan McIlroy who has over 20 years’ experience in Financial Services recruitment. For further advice, do not hesitate to contact us for a confidential chat.
