IFAs looking to target higher-net-worth clients or clients with more complicated circumstances should think about adding to their professional qualifications.
The aim of the Advanced Financial Planning Certificate, run by the Chartered Insurance Institute, is to offer a qualification which demonstrates the holder is capable of advising clients whose overall levels of income and capital require a more sophisticated scheme of investment than an FPC-level adviser can give.
To get the core AFPC, three papers must be passed out of a possible eight but IFAs can be exempted from up to two papers if they already hold qualifications from recognised professional and academic bodies which have been obtained by exam. The compulsory paper must be passed or exempted as above.
The core AFPC shows an IFA to hold a higher level of expertise generally but there are areas of work where specific AFPC qualifications must be held. The PIA says all member firms advising on pension transfers and opt-out business must have a nominated pensions transfer specialist who has passed the G60 pensions paper or another appropriate qualification.
The PIA has also approved the G70 investment portfolio management paper as an alternative to the Investment Management Certificate for individuals who act as broker fund advisers or discretionary managers.
The AFPC papers, which last for three hours, are G10, taxation and trusts. G20, personal investment planning. G30, business financial planning. G60, pensions. G70, investment portfolio management. G80, long-term care, life and health protection. H15, supervision and sales management and H25, holistic financial planning. The CII recommends IFAs study G10 before tackling other AFPC papers, as all the other papers build on it.
Syllabuses for the exams are printed in the AFPC syllabuses and exemption guide, available from the CII.
The CII is introducing new initiatives to make it easier for IFAs to prepare well for the exams. CII public relations manager Steve Radford says: “We're conscious of the fact we need to assist people to be successful. We run a range of courses that cover the subjects and Sofa run revision courses. Some IFAs find the discipline of having to work on a regular basis helps.”
The CII offers a continuous assessment option, where a candidate completes questions at home and sends them to be marked. Candidates who follow that procedure successfully, by achieving regular satisfactory marks, can take up to 10 per cent of marks in to the exam. Radford says: “We find people who do the continuous assessment tend to do better in the exams.”
Sofa's study groups last for 13 to 18 weeks, three hours a week. Sofa website and publicity co-ordinator Adrian Senior says: “The sessions are group led. There is a facilitator – who has already passed the exams – but not a teacher.” Both the CII and Sofa run pre-exam crammer days.
To assist candidates in analysing areas which can prove problematic and need more work, the CII publishes examiners' reports which look at the key issues of difficulty and complexity from previous sittings.
To make the exams seem less daunting to busy IFAs, the CII is introducing the “half-credit AFPC exam”. With the first sitting to take place this spring, FPC holders can sit the retirement option and the pension investment option. Each exam will count as half a qualifying paper but together form a different paper from the G60 pensions option.
Take-up for this option has been strong, with 600 candidates due to take the first test in April.
Senior says: “The G60 pensions paper has the highest take-up rate but also has the highest rate of failure. This suggests people are sitting the G60 without having prepared enough.”
Designation is graduated by the numbers of papers passed. Sofa members who pass the three core AFPC papers are designated Member of the Society of Financial Advisers, members having passed six exams from either the CII or from the AFPC papers are designated Associate of the Society of Financial Adviser, and those who pass 10 papers are designated Fellow of the Society of Financial Advisers.