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Just How Hard Is The Financial Advisors Exam ?

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Hello

I have recently heard the sad story of a friend of the family. In short she is a widow in her late 60's her investments were sorted by her ex-husband and consisted of a nice spread of ISA's that had done pretty well plus safety money in building societies. Then in 2007 she was contacted by a neighbour who happens to be a financial advisor who impressed her with his nice suit and fancy car so without telling anyone she cashed in most of the ISA's and gave it all to the financial advisor. In early 2009 she learned her portfolio was now worth slightly more than nothing since the idiot had invested 100% of a widows savings in a commercial property bond that is now almost worthless. From what we understand she has lost almost £90K.

I'm told legal advice was taken but since the neighbour was a financial advisor and had passed whatever certification they require nothing can be done. In addition his business has now collapsed and his house is about to repossessed so he has no money. It doesn't look like he did anything criminal but rather that he was very very stupid.

Now I work in engineering and the total of my investment knowledge is the odd dabbling in the stock market , a few ISA's and I read the Sunday Times Money section but I would know not to put a widows savings into a single reasonably high risk investment. So just what qualifications does a financial advisor require ? and how hard are the exams ?

Are cr*p financial advisors common ?

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Hello

I have recently heard the sad story of a friend of the family. In short she is a widow in her late 60's her investments were sorted by her ex-husband and consisted of a nice spread of ISA's that had done pretty well plus safety money in building societies. Then in 2007 she was contacted by a neighbour who happens to be a financial advisor who impressed her with his nice suit and fancy car so without telling anyone she cashed in most of the ISA's and gave it all to the financial advisor. In early 2009 she learned her portfolio was now worth slightly more than nothing since the idiot had invested 100% of a widows savings in a commercial property bond that is now almost worthless. From what we understand she has lost almost £90K.

I'm told legal advice was taken but since the neighbour was a financial advisor and had passed whatever certification they require nothing can be done. In addition his business has now collapsed and his house is about to repossessed so he has no money. It doesn't look like he did anything criminal but rather that he was very very stupid.

Now I work in engineering and the total of my investment knowledge is the odd dabbling in the stock market , a few ISA's and I read the Sunday Times Money section but I would know not to put a widows savings into a single reasonably high risk investment. So just what qualifications does a financial advisor require ? and how hard are the exams ?

Are cr*p financial advisors common ?

most people are crap - its not just financial advisors

commercial property - the fund houses were sending out plenty of glossy brochures back in 2005 - always a good sign

you canna go wrong with bricks and mortar

edit to add

bonds - sometimes paid circa 7% commission - if commission taken

of course there are a minority who charge fees or hourly rates (tend to be the better ones)

Edited by lowrentyieldmakessense(honest!)

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Not sure if it's the same thing but I did the FSA exams a few years back (Reg, Securities and Derivatives). They were so simple a small child could do them. I always thought they were similar to the driving theory, impossible to fail, simply another cost.

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The basic exams required to be a financial adviser are pretty easy. In addition, some advisers have been practicing for many years and so did the exams when they were even easier (and have forgotten everything they learned). That's not to say all advisers are poorly qualified though, there are higher level qualifications done by some advisers which far far more demanding and more credible.

However, regarding the problem, it's not necessarily true that because the adviser had passed exams nothing can be done. Read this:

http://www.financial-ombudsman.org.uk/cons.../complaints.htm

I'd recommend calling the number given, as even if the adviser's business has closed down there may still be avenues to pursue.

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The basic exams required to be a financial adviser are pretty easy. In addition, some advisers have been practicing for many years and so did the exams when they were even easier (and have forgotten everything they learned). That's not to say all advisers are poorly qualified though, there are higher level qualifications done by some advisers which far far more demanding and more credible.

However, regarding the problem, it's not necessarily true that because the adviser had passed exams nothing can be done. Read this:

http://www.financial-ombudsman.org.uk/cons.../complaints.htm

I'd recommend calling the number given, as even if the adviser's business has closed down there may still be avenues to pursue.

Professional indemnity insurance.

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Not sure if it's the same thing but I did the FSA exams a few years back (Reg, Securities and Derivatives). They were so simple a small child could do them. I always thought they were similar to the driving theory, impossible to fail, simply another cost.

We had a graduate who failed 3 times and we had to let him go.

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i think he may be able to sue them i cant remember but advisor with clients over a certain age should be in risk free low return investments or somethign like that.

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Not sure if it's the same thing but I did the FSA exams a few years back (Reg, Securities and Derivatives). They were so simple a small child could do them. I always thought they were similar to the driving theory, impossible to fail, simply another cost.

pretty easy really those exams.

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Hello

I have recently heard the sad story of a friend of the family. In short she is a widow in her late 60's her investments were sorted by her ex-husband and consisted of a nice spread of ISA's that had done pretty well plus safety money in building societies. Then in 2007 she was contacted by a neighbour who happens to be a financial advisor who impressed her with his nice suit and fancy car so without telling anyone she cashed in most of the ISA's and gave it all to the financial advisor. In early 2009 she learned her portfolio was now worth slightly more than nothing since the idiot had invested 100% of a widows savings in a commercial property bond that is now almost worthless. From what we understand she has lost almost £90K.

I'm told legal advice was taken but since the neighbour was a financial advisor and had passed whatever certification they require nothing can be done.

This is not true.

As a qualified financial advisor he has to give best advice. If he doesn't he (his compnay) can be forced to make up the loss. If he can't pay, some central fund or other will pay. This is what being qualified is all about.

I have seen a case reported recently where the regulator rulled that putting 100% of someone's capital into a commercial propert was not best advice, especially if the person was a pensioner who was more interested in income than growth. The general feeling was that nobody, repeat nobody should be advised to have more than 10-15% of their portfolio in commercial property.

If she really did receive this advice from a professional, then she should start a claim for compensation through (whatever the offical body is called this week)

tim

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So just what qualifications does a financial advisor require ? and how hard are the exams ?

Are cr*p financial advisors common ?

1. The only requirement is a set of exams which range from A level complexity to GSCE. They take around a year to take. Some are multi choice. Passing is NOT difficult.

Some, perhaps 20% of 'advisers' have gone on to take further exams from equivalent to 1year degree standard right up to degree standard and equivalent level to chartered acountancy.

2. Absolutely. I put it at 97 out of 100.

Even those with degree standard qualifications are crap though they think thyey're great. It has now been proved, as most client portfolios of these idiots/pretenders are down 30% on 2007 and they will be down 60% by the end. But they will say, they couldn't know. Boll0cks.

Also, being an Independent is NO mark of quality. Higher level exams help but that's all. BTW - solicitors get far more complaints to their regulatory body pro rata than IFAs to the FSA.

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The FSA is v easy as someone has noted, provided that you prepare properly noone should fail.

The CFA, which most half decent financial advisors should have done, is another story altogether, it's taken over several yeras with the last 2 stages being exceptionally hard work.

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Amazon are currently doing word for around £60 and you can probably pick up a second hand PC and a printer that will do your financial adviser certificate for around a hundred quid.

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Why do you need an exam? Why should you know more/be better than those without?

Just put your money where your mouth is and what you believe in. ;)

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I did the FPC back in the 90's in order to get a small payrise when I was involved in Financial Services Advertising.

It took about two weeks reading to complete three papers, and no, they don't teach anyone foresight.

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The FSA is v easy as someone has noted, provided that you prepare properly noone should fail.

The CFA, which most half decent financial advisors should have done, is another story altogether, it's taken over several yeras with the last 2 stages being exceptionally hard work.

The CFA would make you over-qualified to be an IFA. It would be like taking a Phd to become a secondary school teacher. What is needed to be an IFA is a reasonably good knowledge of investments, financial planning and tax law (hopefully all covered in the exams) and some proper common sense.

On the topic of the FSA exams, they are certainly easier now than they were about 5 years ago, and they were not very difficult then.

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I did them with the chartered insurance institute while working in a call centre over a couple of months, CF1-4 are multiple choice, i think 60 or 70% to pass, usally even someone who hadn't read the text could discount 2 out of 4 possible answers, leaving the remaining 2 choices as a 50/50 guess. The exam for cf5 is slightly more taxing in that you are given case studies which you have to give appropriate advice, but really its not difficult if you have a smidgin of common sense.

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Why do you need an exam? Why should you know more/be better than those without?

Just put your money where your mouth is and what you believe in. ;)

Problem comes when you're putting someone else's money where yet someone else's mouth is (i.e. whoever last shouted in your ear).

But yes, I think this sounds like a clear case of mis-selling of financial products. Unlike my friend who was told to put a substantial chunk of her divorce settlement into a good sound fund, with a good sound company - Equitable Life.

db

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