A Q&A on how to transform yourself from an investment banker into an independent financial advisor

With investment banking jobs seemingly disappearing by their thousands, you can be forgiven for thinking you’d like to move into a related industry and become an IFA.

However, following the FSA’s Retail Distribution Review becoming an IFA is less easy than it used to be: you will now need to be appropriately qualified.

If you want to move into independent financial advice, the following Q&A, with Diane Leadbetter-Conway, Publishing Director at training company BPP Financial Services and Markets, may therefore prove informative.

Q: Are there any qualifications that an investment banker might have which would be relevant to a career as an IFA under the new retail distribution review regulations?

Diane: Yes. The current transitional arrangements would certainly suit an investment banker who may be looking for a change in career. The traditional investment banking industry qualifications such as the CISI Certificates or the CFAUK Investment Management Certificate (IMC) would be an excellent platform by which to essentially upgrade.

The individual would be required to complete certain "gap-fill" areas, where the older exam qualifications (above) have not met all the criteria to ensure RDR compliance. These gap-fill areas could include personal taxation, financial protection and retirement planning as well as securities and derivatives knowledge.

Q: Have you seen a big increase in people interested in taking RDR compliant exams?

Diane: Yes. There has been a steady rise in people taking various RDR compliant exams ever since the requirements changed.   With the deadline to be RDR compliant a year away, we are anticipating that these numbers will increase further.

Q: Which qualifications do people tend to take?

Diane: There are certain qualifications that appear to be favoured by investment banking candidates. In particular, these include: the CISI Diploma paper - the Private Client Investment Advice & Management (PCIAM) qualification. This is a Level 6 exam that meets the majority of RDR requirements (94% compliance). The remaining areas are then completed with gap-fill papers.

We have also seen a rise in numbers of people opting to take the relatively new CISI IAD, Investment Advice Diploma exams, which are OFQUAL level 4 exams.  Additionally the CISI Wealth Management Masters, which is a Level 7 exam, has been attracting considerable interest from those looking to attain an expert level qualification that demonstrates understanding well above and beyond the required RDR Level 4 minimum

Q: Have you seen a big increase in investment bankers who want to re-qualify as IFAs?

We have seen a large increase in investment bankers who are opting to take these exams, although it remains to be seen whether they wish to re-qualify as IFAs or simply enhance their current position with their current employer. Interestingly, we have actually seen several ex-IFAs entering the wealth management and private client advice arena, who themselves are upgrading their previous qualifications (such as FPC qualifications) in order to enhance their credentials in the current market.

Q: What is the minimum amount of time it would take someone without a background in retail investment advice to become RDR compliant?

The simplest, most time efficient route would have to be the CISI PCIAM route, with additional gap fill requirements. The time required to pass this PCIAM exam is recommended to be in the region of 200 hours. However that is likely to be for someone with experience in the market. There are also gap-fill requirements to be met afterwards. These would involve around 3-4 days worth of additional training, but no subsequent exams.

In order to give yourself a reasonable chance to passing the PCIAM exam, we would recommend starting a training and exam revision plan approximately 3 months before the exam date itself. Once the exam results are announced, approximately 2 months after the exam itself, you would then have to apply for your Statement of Professional Standing from the CISI. This may take time, based upon the expected increase in applicants applying for this statement.

Overall, you’re probably looking at 6-7 months, from start to finish as a minimum, but, to be on the safe side and to allow for retakes or other contingencies such as work commitments, 12 months would be advisable.