0: If you want to become a financial planner in 2021 This video is especially for you. I get

6: this question on a regular basis loads of emails each month from blog readers,

10: podcast listeners, and YouTube viewers who are all keen to start their career in financial planning.

18: In this video, I've pulled together the main things and the three steps you need to think about

23: if this is something that you're interested in doing. Before I get into the steps you need to

27: consider. I have to say it is a fantastic career. It really is. There is a relatively small number

32: of financial planners in the UK, combined with a large and rising demand for advice.

38: That's because more of the postwar baby boomer generation are reaching retirement age,

42: and they've got their accumulated pension, property and investment wealth. At the same time,

46: there's this opportunity to serve younger investors, including entrepreneurs and young

50: professionals who need coaching and guidance to build a long term financial plan and also to

56: avoid potentially disastrous investment decisions. The money is good according to the recruiter read

62: the average financial advisor salary in the UK is 70,000 pounds a year. But in reality,

67: the sky is the limit. The more fee income you generate for your employer,

71: the more you'll get paid. A good rule of thumb is a salary of a third of your generated fees

77: bring in say half a million pounds a year fee income into a financial planning business,

82: and it's realistic to expect to be paid 160,000 pounds a year. I know several financial planners

87: who earn significantly more than top city lawyers. But of course, it's not all about the money.

93: Financial Planning is a career option where you can genuinely help people you help clients avoid

98: mistakes put in place valuable protection should the worst happen. Understand the best decisions

103: to make during stressful times. It's an incredibly privileged position where you get to know people

109: and their personal circumstances, goals and objectives. Your clients will grow to trust the

114: advice you give them. With all of that in mind, how do you become a financial planner in 2021

119: the main routes into the profession back in the day when I got started around 20 years ago,

124: were through insurance companies or banks. I started as what's called a broker consultant

130: for two large insurance companies, effectively acting as a technical salesperson selling products

135: from those insurance companies through financial advisors. Other financial planners I know today

140: got started working at banks selling investment, pension and protection products to bank customers,

146: while gaining valuable experience in the process. Sadly, these entry points to the profession are in

151: very short supply today. If you want to become a financial planner in 2021, you probably need

157: to find another way in. So step number one in most cases is to get yourself into a financial planning

163: business in any capacity, and then work your way up to the position of financial planner, it has to

169: be a little bit careful when I use that to work your way up in this space. Because the roles of

174: administrator and paraplanner within the financial planning profession are incredibly valuable.

179: It's a bit like a three legged stool, remove the administrator paraplanner, all financial planner

184: from the business and the store would just fall over. But assuming that you're not a qualified

188: and experienced financial planner already, this is where you're going to need to start.

192: You need to learn your trade and there's no better way of getting experience and being within the

196: business itself. Learning from those with years of experience even decades of experience. In some

202: cases. Please be clear with your prospective employer that you've got ambitions to become a

206: financial planner that might well put some bosses off as they're looking to recruit someone that's

210: prepared to stay in that administration or trainee power planning role for a long time, but others

216: will relish the opportunity to grow their own talent to mold a financial planner in the image

221: of themselves perhaps even creating their own future succession plan. Step number two is to

225: get yourself qualified since the end of 2012. The minimum qualification requirement for a financial

231: advisor in the UK is equivalent to a diploma level or our Qf level four equivalent to the

237: first year of an undergraduate university degree. The qualification that we see most commonly comes

242: from the Chartered Insurance Institute the CI and it's called the Diploma in regulated financial

248: planning. This is from the CIA's website. The Qf level four Diploma in regulated financial

252: planning meets the FCA qualification requirements for retail investment advisors, developing core

258: technical knowledge and financial planning capabilities across six core areas. This exam this

264: qualification requires an average of 370 hours of study. Although that amount will vary depending on

270: any prior knowledge you've got and how quickly you're able to grasp the various subjects.

276: There are six exam units to complete. They're called financial services, regulation and ethics.

281: That was pretty dull, but it provides a very important foundation for the rest of your study.

285: There's investment principles and risk, personal taxation, pensions and retirement planning,

291: financial protection and then financial planning practice with the exception of that last exam

296: module which brings together all of your knowledge from studying the other module.

300: The exams are multiple choice format. The first two exams are two hours long each. They've got 100

305: multiple choice questions each and the notional pass mark of 65%. The next three are each one

311: hour exams with 50 multiple choice questions. And then that final module financial planning practice

316: is a three hour exam. With to written case study is all about financial planning practice,

321: you get those case studies a couple of weeks ahead of the exam. So you've got some time to prepare,

326: what you're going to say what your answers look like. For each exam paper between six and seven

330: internet students pass. They aren't easy, and the study can be quite involved, but they're not

336: impossible either. If you're already in the habit of studying, for example, you've come straight out

340: of college or uni, and you're able to find ways to apply the knowledge in real life scenarios, which

346: is what makes working in the financial planning business incredibly valuable, then these exams are

350: certainly doable. I should point out at this stage that other professional bodies are also available,

356: offering different exams and routes to becoming qualified as a financial advisor.

360: As an employer. I'm quite snobbish when it comes to this, I probably shouldn't be.

363: But when I see candidates qualified through the Chartered Insurance Institute,

368: I automatically rate them higher than those with exams from other Institute's, for example,

372: the London Institute of banking and finance, who have gotten a diploma for financial advisors is

377: silly because it's subject to exactly the same standards as the CIO qualification. But 20 years

382: of doing this suggests that its status isn't quite the same. Apologies if I'm offending any holders

388: of the diploma for financial advisors by saying that it probably goes without saying, but I should

392: mention it, you need to have basic math skills and the ability to communicate in English in writing

397: and also spoken English. Don't let the math spirit overwhelm you. I'm not that great at math,

402: software calculators, they do a lot of the heavy lifting for us as financial planners,

407: nobody's expecting you to be able to calculate investment returns, or tax bills in your head.

411: So basic understanding is absolutely fine. Step three. And because becoming a financial planner

416: is about so much more than just your technical knowledge. You need to require a great deal of

421: skills and practical experience, beyond knowing about pensions legislation, how investments work,

428: financial services, regulation and taxation, you need soft skills to if you're moving into

433: the financial planning profession from another career, then you might come quite well equipped

438: with a lot of these soft skills is the ability to ask good questions and listen to the answers

444: is about empathy with individuals who are often going through very stressful situations.

449: It's about decision making, and increasingly, it's about the behavioral side of Finance.

454: If you need to brush up on these soft skills or learn them from scratch, then that's absolutely

459: fine. There is a wealth of resources available. Read books seriously, if you're not already

464: doing so. Commit to reading at least one new book a fortnight covering the soft skills,

469: listen to podcasts, watch YouTube videos, absorb this stuff like a sponge. One of the organizations

475: I really rate who are doing some fantastic work in this space around soft skill acquisition for new

480: financial planners is next gen planners. In fact, they offer a training contracts, which is worth

486: checking out as its program for new entrants that takes you to the level four qualification level.

491: And it gives you the skills training that you need along the way. That training covers the skills you

496: need to establish empathy, trust and rapport with new prospects and also with clients. I'll put a

501: link to the next gen planners training contracts in the description. And it's a soft skills I would

507: add the ability to promote yourself because an essential part of being a financial planner

511: is the ability to generate leads and convert prospective clients into engaged clients. While

517: the financial planning profession has moved on a long way from its old days of selling products,

522: it is still a sales role, albeit with a focus on selling services. With the products coming

528: much lower down in the process, you are going to need some sales skills to that's it in a nutshell,

534: three main steps to consider one, find an entry point into an existing financial planning business

539: as administrator or a trainee paraplanner to start studying and get your qualifications.

545: And step three acquire the necessary soft skills as well. One closing thought on this subject on

551: this question about becoming a financial planner. Please go all in. This is not a profession you can

557: dabble in or answer and then take it easy. There is a huge amount in terms of knowledge and skills

562: to acquire both initially and then also on an ongoing basis. Once approved by an authorised

568: and regulated business, you have to maintain continuing professional development CPD each year,

573: a minimum of 35 hours a year for many advisors at least 50 hours a year depending on your

579: qualification level. And which advice areas you cover your minimum qualification requirement that

584: Diploma in regulated financial planning. That is just a starting point to financial planners

589: who are serious about their careers continue to study. They become Chartered Financial Planners

594: or they complete the CSI Certified Financial Planner qualification. There are tons of

599: different accreditations and memberships available out there. Depending on the niche area you choose

605: to follow. If you're entering the profession to sell mortgages or protection, then the bar is a

610: little bit lower in terms of qualifications and continuing professional development. But as soon

614: as you want to advise on pensions, investments, tax planning, just holistic financial planning,

620: then you need to go all in you need to take it incredibly seriously. Because after all,

625: you're advising people about what to do with their money and what to do with their life.

629: And that is a serious business. Do you have any questions about becoming a financial planner?

633: drop them in the comment section below, and I'll do my very best to answer every single

637: one. Thank you for watching this video. Until next time, I'm Martin Bamford.

641: And remember when it comes to your money, the more you know, the faster it can grow.