How to become an IFA

If you want to pursue a career in finance, there are several routes you can take such as choosing to specialise in mortgages, pensions or a number of other financial issues that clients require professional help with. However, if you don’t want to pick just one field within finance to specialise in and would prefer to operate with the freedom to provide clients with unbiased financial advice without being tied to a single provider, working as an Independent Financial Adviser (IFA) could be the ideal job for you.

In this blog, we look at what an IFA is, how it differs from other roles within the world of finance, and how you yourself could train to become an IFA.

What is an IFA?

The primary duty of a financial adviser is to offer professional and informed guidance to clients on a range of different issues such as savings, retirement, mortgages, redundancy, inheritance, divorce and financial family planning. However, working as a financial adviser is possible in two different forms: operating as an independent financial adviser or as a restricted financial adviser.

You may think that the difference between these two types of roles is complicated, but it’s actually relatively simple. While restricted financial advisers are limited to solely providing products from the company they work for and are often only given the opportunity to offer advice on specific areas of finance, an IFA is able to offer a far more extensive range of options and can provide support on a number of different fields within finance.

Different factors can play a part in your decision to work as a restricted or independent financial adviser, but it’s often affected by where you’re working. For example, if you were working at a bank or building society, you would be restricted to only providing products from the specific company you’re working on behalf of, and you may be limited by the specific role you’re in, such as if you were solely advising on mortgages, loans, savings or pensions. Operating as an independent financial adviser working on a freelance basis or within a law firm would be different to this, as you would be able to look at every option on the market without leaning towards a specific provider.

How do you become an IFA?

In order to become an IFA, you first need to complete a Level 4 Diploma for Financial Advisers (DipFA). This qualification is made up of two units, with the first being based on financial services regulation ethics and the second focusing on advanced financial advice. Assessment for the DipFA is based on a mix of coursework and both written and multiple choice exams.

Upon completion of the DipFA qualification, you will be able to apply for a Statement of Professional Standing (SPS) from an approved body. The SPS is a requirement for working as an IFA, but after approval, you’ll be able to start your career by applying for roles in a law firm or choosing to work on a freelance basis.