How Qualified Should my Adviser be?

There are a number of ways your financial planner can get professional qualifications, but the words 'chartered' or 'certified' aren't the only things to look for

James Gard 16 November, 2023 | 9:25AM
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This week I looked at financial planning and advice in the context of regulation. Now I'll make a brief run-through of the qualifications your financial planner may (or may not) have.

In professions such as law, accountancy and medicine, having a qualification is essential. In days gone by, the framed certificate on the office wall and the letters after practitioners' names were enough to say "this person is qualified to perform professionally".

In less recent history, financial advice has relied less on professional certification. The "family financial adviser", if you had one, would be a trusted insider with a roster of wealthy clients and would trade on his reputation. That's now changed. Why?

It's partly the the professionalisation of office jobs, and, dare I say it, the increased competition for roles in the modern workforce. That goes for financial advice on investment products and financial planning for clients in need of a broader framework. If you have a job advising on mortgage or protection products, you need to have an appropriate qualification, but you likewise will probably struggle to piece together the answer to clients' tax conundrums if you lack the requisite (and up-to-date) qualifications.

The main change is the 2012 Retail Distribution Review (RDR), however. That did away with financial advice commissions and upended the advice industry, making "RDR compliance" essential and simultaneously reducing the pool of advisers to one of a more concentrated, qualified, and arguably more highly-paid pool of professionals.

To The Next Level

There are some competing qualifications in the marketplace. It's probably fair to say the "Certified Financial Planner" (or CFP) is becoming the gold standard on a global level. Like the Chartered Financial Analyst badge, CFP originated in the US but UK financial planners can achieve it after writing several case studies and exams.

The Chartered Institute for Securities & Investment, which conducts the exams on this "pathway", stresses practical experience as well as "financial counselling skills". The idea is that you don't just learn the textbook, pass the exams, then set up shop as a financial planner. You need practical experience to be effective.

It's not that simple, however. In recent years, the CFP agenda has struggled to gain the foothold it has in the US. UK advisers have focused a lot of time on becoming "chartered" financial planners instead, a title that has some visual equivalency with the accountancy profession's own ladder of expertise.

Regardless, the first proper step to becoming a qualified adviser is arguably the Diploma in Financial Planning, or DipPFS, whose awarding body is the Personal Finance Society, a part of the Chartered Insurance Institute, or CII. From there, advisers may choose to go down the "chartered" and/or "certified" routes.

On its website, the CII says: "we award chartered status to individual professionals and firms who display eminence in their field. By choosing chartered, you are choosing a financial planner who has made a public commitment to professionalism. They must maintain standards of excellence in qualifications, ethics, business practices and professional development. The CII sets the bar, a firm meets it."

Chartered, Certified, Regulated?

Now it gets confusing. 

You may well see or hear the words "chartered" or "certified" when researching potential advisers, and to be either is prestigious enough. But "chartered" can be awarded in different ways. A firm may be "chartered" but its planners may not individually hold the status, or that of "certified". One of my local regulated advice firms has staff with a range of qualifications, of which "DipPFS" is the most common. If the firm were American, they might well be CFP-level advisers. 

For me, being a regulated entity is a must, and qualifications can only help to build my confidence as a potential client. But word of mouth and time in business also matter. An adviser might be qualified to the hilt but if they are acting nefariously it may well be obvious from a quick Google search. Online reviews can be instructive, as can a business history easily garnered from Companies House.

I asked Peter Chadborn, director and financial planner at Plan Money, whether clients insist on qualifications. Some do, he says, but more important is building up trust and empathy.

In an IFA firm, you get a range of experience and qualifications, with different people catering for different clients. But Chadborn does insist that if you're advising on specific products, it's important to pass the relevant modules.

For younger people entering the industry, financial advice exams often contain a heavy emphasis on professional ethics and conduct, which are useful in rebuilding the profession's trust with the public after repeated scandals. Pay is important too, and qualifications are a way of boosting aggregate salaries – especially as talented young people may be seduced by other parts of finance, which may appear to offer higher pay.

Overall, qualifications are increasingly important, but they are not the only thing to pay attention to. Young or old, your gut feeling when you sit down with your potential adviser will tell you much of what you need to know.

James Gard is an associate member of the CISI and holds the Investment Advice Diploma (Level 4)

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James Gard

James Gard  is senior editor for


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