Finding a good adviser to help you make the right savings and investment decisions is hard enough. But wading through the “alphabet soup” at the bottom of an adviser’s business card is also disconcerting. Knowing how your adviser is qualified is a good start to finding good advice.

My adviser has lots of letters after his name. Should I be impressed?
A long trail of letters may look distinguished but the reality is most financial advisers are not trained to degree level. Anyone wishing to provide financial advice is required by the Financial Services Authority to pass a basic examination which covers core competencies. Beyond this, career-minded advisers can build up an array of specialities, such as mortgages, or advance their knowledge of financial planning
to degree status. The main providers of qualifications for
the securities and investment industry are: the Chartered Insurance Institute (CII) of which the Personal Finance Society (PFS) is a member, the Institute of Financial Studies (IFS) and the Institute of Financial Planning (IFP) or the Securities Investment Institute (SII). North of the border advisers will be accredited by the Chartered Institute of Bankers of Scotland.

What qualifications should my adviser have?
All advisers need to pass a basic exam which many equate to a challenging GCSE, or if we’re being generous, perhaps an A-level. Confusingly for the consumer, qualifications will differ depending on where advisers passed their exam. If they were accredited by the Chartered Insurance Institute they would have the Certificate In Financial Planning (CertFP) which was, until last year, known as the Financial Planning Certificate (FPC). If they are members of the Personal Finance Society they will have the CertPFS title. If advisers were accredited by the Institute of Financial Studies, they will have the title of CeFA, or Certificate for Financial Advisers. SII advisers will have a certificate based on their speciality, such as derivatives or securities. Most advisers working on a tied basis, such as in a bank, will have the CeFA qualification. Traditional IFAs are likely to have CertFP or CertPFS on their cards.

How do I spot an adviser with extra qualifications?
There are two types of advanced qualification: those awarded for general financial advice, and those awarded for specific product advice, such as pensions or mortgages. Advisers who have gone beyond the basics will have the Advanced Financial Planning Certified or AFPC. This means broader knowledge in taxation and trusts and at least several other areas such as holistic planning, personal investment and protection. The more specialities the adviser completes, the further up the professional ladder he or she
will climb, from Member of their professional body to Associate to Fellow. The AFPC is to be replaced this year by a Diploma in Financial Planning and Advanced Diploma in Financial Planning.

What about Certified Financial Planners and Chartered Financial Planners?
Alongside a Fellow, these are the highest qualifications advisers can achieve outside a degree and there only about 1,100 qualified in the UK.

What is the difference between them?
The Certified Financial Planner (CFP) is the more established and most advanced qualification credited by the Institute of Financial Planning. To qualify as a CFP candidates can have legal or accounting qualifications or they can have the AFPC qualification plus three years’ industry experience. They will have completed an assessed case study measuring their financial planning abilities and application of technical knowledge. Chartered Financial Planners can only be credited by the CII. Chartered Financial Planners must have at least five years’ relevant industry experience and approved financial qualifications equivalent to first degree level. Advisers must also be committed to continuing professional development. Chartered Financial Planners cannot shorten their titles to CFPs.

Which is best?
This is a hot potato in the industry. Chartered Financial Planners claim to have the edge because of the academic requirements for status, which they say is equivalent to a degree, even though the qualification is not offered at a university. Certified Financial Planners say their qualifications have a more comprehensive practical grounding as the focus is on demonstrating knowledge and skills through case study work.

What if I want specialist advice?
You should look for these qualifications: G10 (Taxation and Trusts), G60 (Pensions), K20 (Pensions Investment Options), CF6 (Certificate in Mortgage Advice). An adviser with a CeMAP qualification can give mortgage advice.

Do you have any tips on finding the right adviser?
Plenty of websites allow you to search for an adviser based on their qualifications. Independent Financial Advisers Promotion (IFAP) provides the names and addresses of up to four advisers based on their specialities at www.unbiased.co.uk. The IFP has a national register of fee-based financial planners at www.financialplanning.org.uk. The PFS can help you find advisers in your area who have passed at least three financial planning qualifications at www.thepfs.org/findanadviser. You can check on their backgrounds at www.fsa.gov.uk.