Starting a financial advice business

T

Teetrees

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I currently work in tech and am getting very tired of it. I'm on a very decent wage, have a family, house with a mortgage, and living very comfortably. However, I want to work at something that enjoy, and one of those things is financial advice.

Currently, my thoughts are as follows. Study part time and get my QFAs. While working, start with advising friends / colleagues / anyone willing to trust me to get some experience. Focus in on a niche and start establishing a business. Quit my job in tech once there is a stable enough revenue in the business.

Questions:
Am I mad?
What sort of salaries are financial advisor business owners taking in?
Any advice from those in the financial advice world as to what steps I should be considering?
 
Hi Teetrees, sorry I have no advice, but I am following this thread with huge interest and hoping that somebody with experience will answer your query ! As this is a route I am giving consideration to also. I'm not sure how old you are ? But I am in my late 40s and because of my age am hesitating.

I think studying for and obtaining the QFA is very doable in a reasonable time frame ( I work in a different branch of Financial /Insurance Services ) but, my personal worry would be gaining direct experience initially , how much of a salary could a person earn with the qualification but without the experience !

I would presume a person would need to have worked in the field prior to setting up alone ? But I stand to be corrected.

Hoping now someone will come along and help with your initial questions.
 
Personally I think you'd want better than the QFA, it's pretty basic and if I was going to an advisor I'd want someone who either had years of experience or a better qualification, in fact the experience would sway me more than the qualification to be honest. Thing is though people don't often enough question qualifications so might get away with it from that point of view but if someone knows nothing about finance then I don't think a QFA will give you enough to start advising people without relevant experience.
 
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Monbretia said:
Personally I think you'd want better than the QFA, it's pretty basic and if I was going to an advisor I'd want someone who either had years of experience or a better qualification, in fact the experience would sway me more than the qualification to be honest. Thing is though people don't often enough question qualifications so might get away with it from that point of view but if someone knows nothing about finance then I don't a QFA will give you enough to start advising people without relevant experience.
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The QFA qualification is 5 multiple choice exams, followed by a case study where the answer is always the same, just with slightly different details. It's extremely easy to pass all on the first go (source: I am a QFA).
 
Fortune said:
The QFA qualification is 5 multiple choice exams, followed by a case study where the answer is always the same, just with slightly different details. It's extremely easy to pass all on the first go (source: I am a QFA).
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I know, I've done it! I did the multiple choice ones without even reading any of the books that went with it, read the book for the case study one alright but even at that experience alone would nearly carry you through. Applied for and did it on a whim because my employer was offering €1,300 if you passed! Several of the younger staff where I worked completed it too (for the money of course!) and they knew diddly squat about financial advice in my opinion, neither life nor financial experience but were so fresh out of school they were nearly still in study mode! Which is why I wouldn't consider it as a qualification on it's own sufficient for giving advice.

I let mine lapse a few years as I was no longer likely to be working in that area again and it was costly enough to be renewing for nothing.
 
Brendan Burgess said:
I think you should study for the Certified Financial Planner instead. It would be the most serious qualification and the most difficult to get.

About Financial Planning Standards Board Ireland DAC – FPSB

www.fpsb.ie www.fpsb.ie

I think of the QFA as a qualification for life assurance sales people probably working for life companies.

Brendan
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QFA was always a life assurance sales qualification, but it ended up being an accepted qualification for the CBI Minimum Competency. I think it also gives an exemption for the CFP.
 
I honestly don’t think that anyone who has no industry experience and who just completes the CFP qualification would initially do very well as a financial advisor.

Although the QFA is just a basic industry standard it does cover the life and pensions basics very well, including application process, medical underwriting for life cover etc. For someone who has no prior experience of this side of the industry for me this is a must. It is assumed all these basics have been covered when you go to complete the CFP. I’m fortunate to have a worked in a very technical pensions background I admit i found the pensions module on the CFP programme quite limited. You certainly wouldn’t walk away from it as a pensions expert, in my opinion.

I just can’t see how anyone would enter the industry as an advisor, with no relevant experience, just by completing the CFP qualification alone. Yes it would give them valuable financial planning theoretical training but no real life experience of implementation of any financial plan.

For anyone looking to enter the industry as an advisor I’d be suggesting the QFA route and first cutting your cloth as an employee of a brokerage, life company or bank who has a direct sales arm. This will give you time to build a client base, garner relevant experience and allow you the space to see if the chosen route is one for you without taking on the risks associated with being self employed.

Edited to add: it hasn’t been discussed but i’ve assumed you’re aware that you’ll need to be registered with the CBI, carry professional indemnity insurance and have agency agreements with the relevant life insurance companies? If you haven’t already fully researched these requirements these would be a must.
 
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I have never worked in financial services but I know Smoneen has answered your question extremely well.

The QFA was introduced to provide a minimum standard for those working in the various areas.
To help protect the consumer.

Most of the QFA exams are multiple choice but with negative marking for wrong answers.
I presume it’s in that format to help make the exam and marking more efficient.

If you don’t have the knowledge either by studying or experience by working in the areas, you’re very unlikely to pass.
The course does give you a good broad knowledge but understandably not hugely in depth.

You need to build and maintain from there by experience and or further learning.
A manual issued each year by LIA and IOB can help update knowledge.

Passing exams demonstrate you had sufficient knowledge on that subject at that time.

To be honest, qualifications alone don’t necessarily make a good advisor.
Some don’t seem to have sufficient knowledge and understanding.
Some have knowledge and it’s very restricted to a certain area but is extremely in depth.

Best wishes to you and I hope you land doing what you find most rewarding and lends itself to most happiness.
 
Deauville said:
If you don’t have the knowledge either by studying or experience by working in the areas, you’re very unlikely to pass.
The course does give you a good broad knowledge but understandably not hugely in depth.
.
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QFA loans could be passed from just hearing the warnings at the end of ads for loans. QFA Investments is common sense. The rest just need a read of the supplied book to pass.

There's nothing impressive about a QFA.
 
Teetrees said:
I currently work in tech and am getting very tired of it. I'm on a very decent wage, have a family, house with a mortgage, and living very comfortably. However, I want to work at something that enjoy, and one of those things is financial advice.

Currently, my thoughts are as follows. Study part time and get my QFAs. While working, start with advising friends / colleagues / anyone willing to trust me to get some experience. Focus in on a niche and start establishing a business. Quit my job in tech once there is a stable enough revenue in the business.

Questions:
Am I mad?
What sort of salaries are financial advisor business owners taking in?
Any advice from those in the financial advice world as to what steps I should be considering?
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You do realise that the majority of 'Financial Advisors' are simply retailers of financial products. The connection between 'Financial Advisor' and financial advice is comparable to the connection between 'Car Salesman' and car buying advice.
 
cremeegg said:
You do realise that the majority of 'Financial Advisors' are simply retailers of financial products. The connection between 'Financial Advisor' and financial advice is comparable to the connection between 'Car Salesman' and car buying advice.
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This is a solid description of my understanding too. My perspective is that I do not want to be a glorified financial salesperson. I'm keen to educate people....I know of so many friends / colleagues / family who lack some basic understanding of personal finance and want to help teach them and advise them on planning for their futures.

The CBI registration is probably one of the bigger hurdles. I want to continue in my full-time job (which is not related in any way to finance) while also achieving the necessary requirements to be authorised by the CBI.
 
There are 2 sides to this. Firstly, the required/mandatory qualifications and secondly, the setting up of your own business and what you need to have in place as part of that. Your Local Enterprise Office may be able to advise and support on the latter element
 
Teetrees said:
I'm keen to educate people....I know of so many friends / colleagues / family who lack some basic understanding of personal finance and want to help teach them and advise them on planning for their futures.
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This doesn't sound like a sustainable basis for a new business venture, particularly in an area where you lack work experience.

There is an old saying about never doing business with friends and family - because when things go wrong, they can go very wrong.
 
Teetrees said:
This is a solid description of my understanding too. My perspective is that I do not want to be a glorified financial salesperson. I'm keen to educate people....I know of so many friends / colleagues / family who lack some basic understanding of personal finance and want to help teach them and advise them on planning for their futures.

The CBI registration is probably one of the bigger hurdles. I want to continue in my full-time job (which is not related in any way to finance) while also achieving the necessary requirements to be authorised by the CBI.
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I think there is absolutely a need for the role you describe, but there is probably a reason why it is not the usual role of a Financial Advisor, presumably there is no money in it. Also the big institutions like it the way it is.

If you are looking for a hobby, great, but I doubt its a business.
 
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