Adviser qualifications explained

Financial advice

Adviser qualifications explained

By Michael Trudeau

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Adviser qualifications explained

Learn about additional qualifications advisers can get to set themselves apart from the competition.

If you consult an accountant, doctor or solicitor, you expect them to be qualified to a highest standard – so why should you accept anything less with your financial adviser?

But before January 2013, there was no single, high level, easily recognisable qualification consumers could trust when it came to choosing a financial adviser. There were dozens of different financial qualifications, all issued by different bodies and meaning different things.

The Retail Distribution Review and qualifications

However, under the Retail Distribution Review (RDR), which came into force on 1 January 2013, there has been a more coherent framework in place for adviser qualifications.

Instead of being required to reach level 3 of the Qualifications and Credit Framework (QCF), which was the equivalent of an A Level, all advisers now have to meet QCF level 4 – the equivalent of the first year of a degree.

The Financial Services Skills Partnership has also created new Appropriate Exam Standards (AES), which awarding bodies use to develop new qualifications.

Under QCF level 4, the subject areas IFAs must be qualified in are:

  • regulation and ethics
  • investment principles and risk
  • personal taxation
  • pensions and retirement planning
  • financial protection (Level 3) 
  • financial planning practice

International standards

If you want an adviser who aspires to an even higher standard, and one recognised internationally, the International Organisation for Standardization (ISO) offers a further qualification. The ISO22222 certificate involves an 'at work' assessment of the adviser, designed to measure their ability to perform as a financial planner.

If an adviser holds this qualification, you can be confident that they are able to carry out their role to an objectively measured standard. Advisers recertify annually, and undergo a three-year cycle of reviews regarding different aspects of their business.

The ISO qualification also requires advisers to sign up to an ethical code of conduct. 

  • Last updated: December 2016
  • Updated by: Michael Trudeau