How to become a financial adviser

A financial adviser plays a critical role in guiding individuals and businesses through the complex maze of financial decisions. This can include providing financial advice on wealth management, retirement planning, insurance products, debt solutions and much more.

If you’re the kind of person who has an analytical mind, a knack for explaining complex topics in an understandable way, and a desire to help others achieve their financial goals, a career as a financial adviser might be the perfect fit for you.

The following guide explains how to become a financial advisor in the UK. It will cover the qualifications and skills required, how much you can expect to earn, the potential options for career progression, and give an insight into the likely working hours and environments you’ll encounter.

Average Salary

Average Salary

£30,000 to £90,000

Qualifications

Qualification Level

Degree

Weekly Hours

Weekly Hours

37 to 42 hours

What qualifications do you need to become a financial adviser?

The route to becoming a financial adviser in the UK involves a mix of formal education, work experience, and obtaining regulatory approvals. It’s a career path that is both intellectually and financially rewarding but also requires an unwavering commitment to continual learning and compliance with industry standards.

Below are the various entry routes to becoming a qualified financial adviser and the essential qualifications you must possess:

Academic Requirements

  1. Basic Qualifications: At a minimum, most firms require that you have a GCSE in Maths and English at grade C/4 or above. Some employers may also expect A-levels or equivalent qualifications.
  2. Degree Level: A degree in a related field like finance, economics, business or mathematics can be advantageous. Many firms offer graduate schemes, which are perfect entry points for degree holders into financial advising.
  3. Postgraduate Qualifications: Though not mandatory, some people opt for further studies like a Master’s in Finance to gain specialised knowledge, which can be particularly useful if you aim for a niche specialisation.

Professional Qualifications

  1. FCA-Approved Qualifications: Before offering financial advice, you must earn a qualification recognised by the Financial Conduct Authority (FCA). Common choices include the Diploma for Financial Advisers (DipFA) and the Diploma in Regulated Financial Planning (DipPFS). These can often be pursued while you’re working.
  2. Specialist Qualifications: Additional qualifications like the Certificate in Pension Transfer Advice may be necessary for advisers who wish to specialise in areas like pension transfers.

Regulatory Approvals

  1. FCA Registration: You must register with the FCA upon gaining the relevant qualifications. This involves a rigorous vetting process, including background checks.
  2. Credit Check: A credit check is mandatory to confirm that you don’t have unmanageable debts, which could pose a conflict of interest.
  3. DBS Check: A criminal records check through the Disclosure and Barring Service (DBS) is required to ensure your suitability for the role.
  4. Continuing Professional Development (CPD): Once a practising adviser, you must fulfil ongoing CPD requirements to maintain your FCA approval. This includes staying updated with legislative changes and gaining annual CPD points.

Work Experience

Prior work experience in a related role, such as in customer service, accountancy, or sales can be beneficial. Some firms also offer apprenticeship programmes, though competition for these positions is usually high.

What are the primary skills needed to become a financial advisor?

You will need to have a broad range of essential skills and knowledge to work as a financial adviser. These skills will help you work effectively for your clients and help you earn the most within your role.

Some of the key skills you will need to be a successful financial adviser include:

  • Excellent customer service skills and the ability to explain complicated financial matters and products to your clients.
  • A thorough knowledge of financial products, legislation and tax matters.
  • An ability to work in a heavily regulated environment.
  • The ability to maintain standards no matter the industrial, compliance or legislative changes that occur.
  • Solid maths skills.
  • Sales skills and a strong ability to negotiate terms and prices with clients and providers.
  • The ability to build a good rapport with clients and colleagues.
  • The ability to analyse large volumes of financial information.
  • Report-writing skills and the ability to maintain thorough records.

What are the different types of financial advisers?

Understanding the landscape of financial advising involves knowing the different types of financial advisers available. In the UK, advisers generally fall into one of the following categories:

Independent Financial Advisers (IFAs)

  1. Whole-of-Market: IFAs have the flexibility to provide advice on products from across the entire financial market, rather than being tied to any specific company.
  2. Fee-Based: Typically, IFAs charge a fee for their advice rather than commission. This can help to ensure that their advice is unbiased.

Restricted Advisers

  1. Single Provider: These advisers are tied to one financial institution and can only recommend products offered by that institution.
  2. Limited Range: These advisers can offer advice on a limited range of products or providers but do not have the flexibility of an IFA.

Multi-Tied Advisers

These advisers have agreements with multiple providers but are limited to a specific range of products. Their advice is not as broad as that offered by IFAs but offers more variety than single-provider restricted advisers.

Specialised Financial Advisers

Some financial advisers choose to specialise in specific areas of the financial industry, such as:

  • Pensions Advisers: Specialise in retirement planning and pension transfers.
  • Investment Advisers: Focus on asset allocation and investment portfolios.
  • Mortgage Advisers: Specialise in providing advice on mortgage products.
  • Tax Advisers: Primarily focused on optimising clients’ tax positions.

In-House Advisers

These advisers work within a financial institution like a bank or an investment firm, usually as part of a larger advisory team. Their advice may be restricted to the products and services offered by their employer.

Self-Employed Financial Advisers

These advisers operate independently or under a smaller firm. They have the flexibility to set their own hours and may offer a broader range of services depending on their qualifications and FCA registration status.

What will I do if I become a financial adviser?

How your day is structured as a financial adviser will greatly depend on who you work for, your specialisms, and whether you are office-based or ‘on the road’. Some financial advisers will work by telephone and email communication with their clients, whereas others will work on a face-to-face basis.

You might be tied to one financial product provider or ‘whole of market’, allowing you to sell products and plans from any provider. You might specialise in pension advice, investment planning, life protection and savings, amongst many other specialisms. Your day might include duties such as:

  • Meeting with new clients to discuss the service and advice you can offer.
  • Reviewing the financial accounts of your clients.
  • Producing financial reports, budgets and plans.
  • Meeting with colleagues, managers and product providers.
  • Researching various terms, products and legislation.
  • Negotiating fees, commission amounts and terms with product providers.
  • Issuing key features, policy documents and statements to clients.
  • Going through application forms for various products.
  • Choosing the most suitable products for your clients based on their circumstances.
  • Meeting targets
  • Giving clients updates on investment performance

How much does a financial adviser earn?

Financial advisers can earn large sums, depending on what products they sell, their fees and commission rates, and their location. Most financial advisers can expect a starting salary of around £30,000, with the potential to increase their income with bonuses and incentive payments.

With experience, you can expect to earn up to £50,000 per year. Those who are exceptionally talented and can sell significant amounts or arrange high-performance investments can earn more than £90,000.

An independent Financial Adviser will charge a fee for their services, and this is usually between £100 and £200 per hour. This is a guide sum and will significantly depend upon the size of the investment or policy that they are arranging.

Do financial advisers have good options for career progression?

The career progression for a financial adviser in the UK offers diverse opportunities for growth and specialisation. Depending on your interests, skill set, and performance, here are some paths you may consider:

Junior to Senior Adviser

Most advisers start their careers in a junior or trainee role. With several years of experience and ongoing professional development, you can progress to a senior adviser position, handling more complex cases and supervising junior staff.

Specialisation

Financial advisers often specialise in areas like wealth management, retirement planning, estate planning, or risk assessment. Specialisation usually requires additional qualifications and can result in higher earning potential.

Management Roles

Experienced advisers often move into managerial roles such as team leader, department head, or even regional director. These roles involve overseeing a team of financial advisers and possibly other staff, with a focus on meeting organisational objectives.

Compliance and Training

Your expertise can also lead you to roles in compliance, where you’d be responsible for ensuring that financial advice and services meet industry regulations. Alternatively, you might go into a training role, educating new recruits or even providing continued professional development courses.

Independent or Self-Employed Adviser

Some advisers opt for the entrepreneurial route, becoming self-employed or setting up their own advisory firms. This gives you greater control over your client base, the services you offer, and your working hours.

What are the likely working hours of a financial adviser?

If you’re employed by a financial firm, you’ll likely work in an office environment. Standard working hours are usually 8am to 6pm, Monday to Friday. However, occasional overtime might be necessary, especially during busy periods such as the end of the financial year.

Self-employed or freelance advisers have the flexibility to set their own hours. This often means you could be working during evenings or weekends to accommodate the needs of your clients. The trade-off is greater control over your schedule and the potential for a better work-life balance.

The financial industry has adapted well to remote working conditions, and many advisers now have the option to work from home either full-time or part-time. This mode of working often requires robust technology to ensure secure, confidential communications with clients.

Regardless of your employment status, face-to-face meetings with clients are a common aspect of the job. These could take place at your office, the client’s home, or a neutral location. Some advisers also offer consultations via video call.

Some advisers describe their work as being ‘on the road,’ especially those covering large geographical areas or those specialising in a particular industry, like agriculture. For these advisers, a significant portion of the working week could be spent travelling.

Financial advising is a target-driven role, and meeting those targets can sometimes lead to longer working hours. The pressure can be high, particularly when dealing with significant sums of money or particularly complex financial planning.

Working effectively with a team is often an essential part of the job. This could include regular meetings with colleagues, training sessions, and communication with other professionals like accountants, solicitors, and product providers.

Owing to the ever-changing financial landscape and regulatory environment, expect to spend some of your working hours on professional development, whether attending industry seminars, training programs, or studying for additional qualifications.

"Choose a job you love, and you will never have to work a day in your life"