View more on these topics

Fly in the alphabet soup

I have recently met with two financial advisers and am trying to decide which one to do business with. Both have an impressive array of letters after their name although they are not the same. Can you tell me what qualifications an adviser should have and the main designations used in the industry?

All financial advisers are required to achieve at least a basic level of qualification before they are allowed to advise clients. The basic qualification is achieved by successfully completing three exams commonly referred to as the Financial Planning Certificate (FPC).

Anyone offering mortgage advice is required to hold a further basic qualification – either the Mortgage Advice Qualification (Maq) or the Certificate in Mortgage Advice and Practice (Cemap). Opinion on the academic standard of the basic qualification varies between commentators but most accept that it compares roughly with a challenging GCSE or O level or perhaps an A level.

Once an adviser has reached the basic entry level, they can choose to further their education and expertise in much the same way as someone with A levels can go on to obtain a degree, an MA or MSc and eventually a PhD or DPhil.

While many extremely talented advisers have become so because of their many years of experience in the industry – not because they were forced to obtain qualifications – there is often a correlation between a good adviser and a commitment on their part to learn as much as possible about a particular subject. This commitment often expresses itself in a willingness to test this learning by means of various exams, which allow those who pass to claim various designatory letters for themselves.

There can be little doubt that having extra qualifications helps to reassure clients that their adviser takes professional knowledge and continuing education seriously.

The most common method of furthering education is by working towards the Advanced Financial Planning Certificate (AFPC), which requires the adviser to pass three advanced exams from a variety of options including personal investment planning, portfolio management and a compulsory paper on tax and trusts. From here, advisers can choose to sit more advanced exams to achieve further knowledge and more credible designations.

However, having letters after your name is no guarantee of intelligence, professional ability or decent service. Simply because an adviser has a string of designations does not necessarily mean that they have furthered their education – they may hold nothing more than the basic entry-level requirement. Some designations simply indicate membership of particular trade bodies.

An adviser who only has the basic qualification and is a member of the Life Insurance Association is permitted to use the designation MLIA(Dip), a member of the Society of Financial Advisers can use FPC and a member of the Institute of Financial Planning can use MIFP.

It could be argued that anyone using these designations is doing so with the sole intention of impressing their clients, who will be ignorant of the fact that the adviser has achieved only the minimum level of qualification. Joe Smith MLIA(Dip), FPC, MIFP, AIP might look impressive but do not be fooled – he has passed only the minimum required level of financial services qualifications (oh, and has an NVQ2 in plumbing and has paid subscriptions to the Institute of Plumbing).

Achieving the AFPC leads to the more credible designations ALIA(Dip), MSFA and AIFP. A further three advanced exams lead to FLIA(Dip) and ALIA and a further four advanced exams can lead to FSFA. But it should be appreciated that anyone using two or more of these designations has not achieved two or three times the qualification level – they are simply a member of more than one body.

Other credible designations which do involve additional study and specific advanced qualifications beyond AFPC level include FIFP (Fellowship of the Institute of Financial Planners) and ACIB (Associate of the Institute of Financial Services/Chartered Institute of Bankers). There are others but, before being impressed, check them out. A guide is published on IFA Promotion&#39s website at

The FSA is currently undertaking a review of the qualification system and designations that advisers can use. It is possible that there will be significant changes in due course to help members of the public have at least a fighting chance of identifying exactly how qualified an adviser is and not before time.


Aberdeen pays off debt after deal

Aberdeen Asset Management will use the remaining cash from its deal with Edinburgh Fund Managers and New Star to pay down debt once it has plugged a £9m hole in EFM&#39s pension scheme.Aberdeen bought EFM for £36m in shares, selling on the retail funds to New Star for £33m. It will be left with £2.4bn […]

70% pass new CII savings and investment exam

Candidates for the inaugural session of the CII&#39s new Savings & Investments exam have achieved a 70 per cent pass rate.The CII says the fact that 688 of the 983 candidates passed on their first sitting could be attributed to the quality of the exam but also to the level of existing IFA investment knowledge. […]

Out of context

•”Three people over dinner last night told me that I didn&#39t look like Shrek.” – Bankhall&#39s Peter Mann.•”I&#39m sure I was Shep in a previous life.” – Abbey National for Intermediaries&#39 senior key relationship manager Lawrence Gilgallon discusses a pilgrimage to the Blue Peter garden.•”There is definitely fish in that icecream.” – Abbey National for […]


DB transfer shouldn’t be all-or-nothing

By Steve Webb, director of policy In my recent discussions with advisers, a hot topic has been the growing number of people interested in transferring their defined benefit pension rights into a defined contribution pension scheme. With many pension schemes offering eye-watering transfer values, this is likely to be an area of increasing interest. Yet […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm