Who are Financial Planners? How do you Choose One?
Some people may think that independent financial advisers (IFAs) and financial planners are one and the same. We think not.
There are very good financial planners who work for a single investment company or a bank, so are not independent. They don't have access to the whole market for investments, but apart from that constraint, they can help people do better with their money.
There are IFAs who can access the whole marklets but who are really only offering a sales advice service, with little understanding of the long term needs of the people they deal with.
We would propose that financial planning or management is something that can only be offered by people with experience and appropriate qualifications. We suggest that anyone you are going to trust with your money should have seen some of life themselves - maybe having at least 5 years experience in their role and ideally much more. You would not want to see a 23 year old doctor, we suspect! Nor would you want your medical adviser to have only a few GCSEs!
The most qualified financial advisers will be Chartered or Certified Financial Planners and some will have additional specialist training, say in investment management or tax. These people will have been trained to the same level as someone with a university degree. Individuals who are Fellows of the Personal Finance Society will have had additional training and passed examinations so they are qualified to Masters degree level, but at present there are only a few hundred such advisers in the UK and not all of those will be involved in dealing with consumers.
The minimum qualification that will be required from 2012 is at a level that is currently matched by the Diploma of the Personal Finance Society or other equivalents from awarding bodies for banks (such as the IFS). We suggest anyone less qualified may not be a true professional financial manager, although we wholly respect the experience and wisdom of older advisers who may not have chosen to further their education late in life.
In the end, a good financial planner or manager will have both qualifications, up to date training, experience and common sense, You may want to see a few before deciding who you trust.