Career as an independent financial advisor

To become a licensed independent financial advisor, it is necessary to register with the OCF Register in the “autonomous financial advisors” section.

The profession was institutionalized in Italy with the launch of the OCF Register (the supervisory body and registry of financial advisors) on December 1, 2018. The Register is divided into three sections:

• Independent financial advisors
• Independent financial advisory firms
• Financial advisors authorized for off-site offerings (formerly financial promoters)

The requirements to become an independent financial advisor are five: independence, professionalism, organizational skills, financial resources, and integrity. The last one is the same that also applies to financial advisors authorized for off-premises services.

1. INDEPENDENCE REQUIREMENT

Only autonomous financial advisors must meet this requirement. As stated in Article 5 of Ministerial Decree no. 206/2008:

"Individuals who maintain relationships, either directly or indirectly, that could compromise their independence of judgment in providing investment advice cannot be registered in the Register. Those registered in the Register (in the section for independent financial advisors) may not receive any form of benefit from parties other than the client to whom the service is provided."

In some cases, we assist in drafting a tailored safeguard during the registration process with the OCF Register to protect against potential conflicts of interest.

2. PROFESSIONALISM REQUIREMENT

A five-year educational diploma is required, along with having already passed the evaluation test for access to the OCF Register. In certain cases, it is possible to access the OCF Register even without passing the exam.

3. ORGANIZATIONAL REQUIREMENTS

For registration in the Register, it is necessary to prepare an activity program detailing the content of your advisory services, the organizational structure, and the procedures adopted to fulfill the obligations required by law.

This document is not a simple "business plan" but a detailed and comprehensive report of approximately 80 pages. You can find the table of contents of the topics required in the activity program and organizational structure report for independent financial advisors operating on their own on the OCF website.

Due to the high degree of customization required, over 80% of current independent financial advisors and independent advisory firms have relied on our specific support and assistance for OCF Register registration and business start-up.

4. FINANCIAL REQUIREMENT

Before registration in the Register, it is necessary to have already taken out civil liability insurance. An annual discount on the subscription is available within our support service for OCF Register registration.

The exam to access the register of financial advisors (OCF) is the same for everyone and has no expiration date. Once passed, candidates can choose which section of the OCF register to join.

The OCF evaluation test, or financial advisor exam, is an online test consisting of 60 questions. It is administered by the organization every month of the year, except for january and august.

The OCF exam is divided into five subjects. The first two subjects cover 60% of the exam questions, and the minimum passing score is 80 out of 100:

• Fundamentals of financial mathematics and financial market economics; financial planning and behavioral finance
• Financial market law and intermediaries, and regulation of financial advisor activities
• Basics of tax law related to the financial market
• Basics of private and commercial law
• Basics of social security and insurance law

Within the reserved area for aspiring financial advisors (“Candidate Area”), the OCF provides free access to a complete and updated database of 5,000 questions in PDF format, downloadable as zip files from the website. For the exam, 60 questions are randomly selected from this database, which conveniently always has “A” as the correct answer.

Our advice is to start with the quizzes. Studying the answers allows you to trace back to the theory covered in the exam, which can be consulted in various preparation manuals available for purchase online. Additionally, all exam simulations, including subject-specific simulations, are freely available on the OCF portal. Once you register for a financial advisor exam session, a new section will also be unlocked containing the theory.

Currently, registration is only possible for executives at 3rd and 4th level who have provided investment advisory services, and for those who have held a mandate from a bank or network for 2 years within the last 3. In all other cases, passing the OCF exam is required.

The internship to become an independent financial advisor is not yet mandatory. It is expected to be introduced with the new decree, likely within the next 12 months, which will also include professional experience as one of the requirements to practice.

Having a VAT number is not required for registration in the OCF register. You can open it later, when you actually start working as an independent financial advisor.

Professions compatible with registration in the OCF Register under the section for independent financial advisors are: accountant, insurance broker (registered in RUI Section B), and credit broker.

"Credit brokerage activities are compatible with insurance or reinsurance brokerage and financial advisory activities, provided that the respective registration obligations in the relevant list, register, or roll are fulfilled, and that the requirements set forth by this legislative decree, Legislative Decree no. 209 of 7 September 2005, and Legislative Decree no. 58 of 24 February 1998 are met. The possession of these requirements is verified electronically. The exercise of such activities remains subject to the respective sector regulations and controls."

This profession is not compatible with the activity of financial advisors authorized for off-premises services or with the role of financial agent.

"Financial agency activities are not compatible with insurance or reinsurance brokerage activities provided under Legislative Decree no. 209 of 7 September 2005, nor with the activity of a financial advisor referred to in Article 18-bis of Legislative Decree no. 58 of 24 February 1998, nor with the activity of a financial consulting company referred to in Article 18-ter of the aforementioned legislative decree."

No, only having a domicile in Italy is required. It is important to note that soliciting clients outside Italian territory is prohibited, as an independent (or autonomous) financial advisor does not have a “European passport".