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Paraplanners, From Support to Spotlight

The paraplanner’s role is a relatively recent addition to financial planning, having been introduced around the start of the 21st century.

In a short period, the role of the paraplanner has become paramount to successful financial planning businesses. A paraplanner’s role is to take some of the administrative burden off a financial adviser but has expanded from its origins to incorporate research and report writing.

When paraplanners were first conceived, they were ‘just’ financial services administrators. Back in the early 2000s, financial advice was still a sales-led profession, and reports were relatively straightforward. This gradually changed as regulation was introduced to the process, and since RDR, this has accelerated.

With many more pressures on a financial planner to deliver high-quality, risk-rated advice and to ensure that the report and recommendations accurately meet a client’s needs, the administrative and report writing burden has grown and grown… and grown.

The quality of and expectations of paraplanners have risen in line. Nowadays, most paraplanners are diploma-qualified or similar, and there’s been a big step up in the number of chartered paraplanners with level six or level seven qualifications.

Not surprisingly, salaries for financial paraplanners have risen significantly, as using a good paraplanner improves accuracy and efficiency. The paraplanner is no longer the poor relation of the financial planner; they just do a different job.

While a financial planner spends time in front of clients, paraplanners increasingly get involved in the fact-finding and advisory process through reporting and even attending client meetings sometimes.

One big difference, however, is that the financial adviser is the person legally responsible for any advice given – even if someone else in the chain writes the recommendations. Responsibility for a mistake in any part of the process lies with the financial adviser.

While some paraplanners will go on to become full financial planners, the more flexible hours and less travel mean that many of the top paraplanners are careerists, earning significant salaries and making a major contribution to their company’s success.

A good paraplanner will be highly technically competent and likely have an inquiring mind to solve problems, while the financial planner will increasingly focus their time on relationship building to help grow the firm – not in the old-fashioned way of persuading people to buy from them but in the modern way of building a trusted relationship over time with clients to help them in more wide-ranging ways and encouraging them to pass on referrals.

Paraplanning is now recognised as a profession in its own right, and a good paraplanner can really make a difference to a financial planning business, helping it provide an outstanding service to clients, or supporting financial planners, and helping the business to become even more efficient and more profitable.

There was a time when a team might have one paraplanner between four or five financial advisers, and often, the paraplanner might be seen as only essential for major clients. Nowadays, however, a firm is more likely to want to ration the financial advisers’ time, just focusing on the key interactions with clients – and as an adviser may, these days, have a bigger list of clients, they may have the support of a paraplanner and an administrator to divide the task into three.

It is possible to outsource paraplanning, as a paraplanner often does not need to meet the client. This makes the job attractive to people who might value the opportunity to work flexible hours from home.


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