Oran Hall | A career as an investment adviser
QUESTION: I am currently a sixth former and I am thinking of choosing the career path of being a financial adviser. After reading your article "The attractiveness of stock splits," I decided that I should email you for guidance and further details on the career (qualifications, etc.). Thank you in advance for your courtesies
FINANCIAL ADVISER: In a broad sense, financial advisers educate and help their clients to evaluate their financial status, to make a plan to realise their goals, to execute the plan and to monitor it to ensure that it is fulfilling the purpose for which it was set up. Some elements of the plan are money management, insurance, taxation and investments.
It seems that you are interested in the investment aspect of personal financial management and that is quite all right as, generally, financial advisers often specialise in particular areas of financial planning and management. There are, for instance, insurance advisers and investment advisers. I will focus on investment advisers and dealers and their representatives.
In Jamaica, the Securities Act requires that individuals and companies wishing to enter the securities industry as investment dealers and investment advisers and their representatives should be licensed by the Financial Services Commission (FSC).
The Securities Act defines a dealer as "a person who carries on the business of dealing in securities, whether as principal or as agent." This means that the functions of dealers include acquiring, disposing of, subscribing for or underwriting securities.
The Act defines an investment adviser as "a person who carries on an investment advice business, which means advising persons regarding investing in or the buying or selling of securities." Dealers and advisers are licensed but their representatives are registered. Dealers, advisers and their representatives are required to meet financial and educational criteria set by the FSC.
The educational requirements for investment dealers and advisers are the same. They include at least a Bachelor's degree in economics, accounting or a business-related subject, or a professional qualification in law or accounting, or a course in securities approved by the FSC.
Investment dealer represent-atives and investment adviser representatives are required to meet the same educational requirements as investment dealers and investment advisers or to have a diploma or certificate in accounting, economics or business-related subjects granted by a tertiary educational institution approved by the FSC.
The courses currently approved by the FSC are:
- The Jamaica Stock Exchange online securities course offered by the Jamaica Stock Exchange e-campus
- The post graduate diploma in financial securities management course offered by the Jamaica Stock Exchange e-campus
- The financial securities management course offered by the University of the Commonwealth Caribbean
- The Jamaica securities course offered by the Jamaica Institute of Management
- The portfolio management programme offered by Fitz Ritson and Associates
- The Canadian securities course offered by the Canadian Securities Institute
Investment representatives and dealer representatives do not own the securities businesses but are employed in such capacities. They carry out several functions including the trading of securities such as stocks and bonds, giving investment advice and managing investment portfolios.
GOOD ANALYTICAL SKILLS
It is not always possible to gain immediate employment in any of these areas, but it may be possible to enter the industry in capacities such as financial analysts or research analysts. These positions require incumbents to have good analytical skills and to have a very good grasp of economics and accounting.
Analysts play a key role in the industry as the services they render help other members of their team to give sound advice to the public and this analysis is not limited to historical performance as it is important to be able to make reliable projections.
You need not worry about the financial requirements now as they apply to the dealers and advisers and not to their representatives. That is a matter to attend to if and when you are ready to set up business as an investment dealer or investment adviser.
Stockbroking companies, banks, building societies, credit unions and portfolio management companies are the primary businesses to which you may look for employment.
- Oran A. Hall, the principal author of 'The Handbook of Personal Financial Planning', offers personal financial planning advice and counsel. Email firstname.lastname@example.org