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Paraplanning in the spotlight

  • By Sue Whitbread

Is paraplanning now seen more as a career choice in its own right, or simply as a step to becoming an adviser? Sue Whitbread reflects on the rise of paraplanning and finds this dynamic profession in excellent health


As the paraplanner role gains importance and recognition, is it likely that in future we’ll see increasingly more paraplanners who intend to remain in the role and develop their skills still further? In my opinion the answer to this question is yes. I see it as a logical development within a rapidly growing, dynamic group within the financial planning profession. In fact, if we lift the lid to check what is going on here we’re already seeing this happening.

Before we look ahead, let’s reflect on where paraplanning has come from. Years ago the term “paraplanner” was often loosely used to describe anyone working in a support role within an advisory business. Whilst some people were clearly operating in what we now recognise as a paraplanner role, others were providing what was really more of an administrative support role. Thankfully, there is greater clarity now as roles have been clarified and streamlined to reflect the underlying activities undertaken.

So what’s changing? At its most basic, paraplanning requires a rather different skill set to that of an advice role.

The activities in which Paraplanners tend to be more dominant could be said to be more “left brain” orientated, that is a mindset which is more logical, detail orientated and analytical. These are skills well suited to due diligence, building financial plans, generating client reports, carrying out reviews all of which are associated with the paraplanner role.

The fact that more and more firms are seeing real, tangible business benefits from having an effective paraplanning function means that demand for experienced, well-qualified paraplanners is on the rise. As the demand for their services increases, in the short term the supply of Paraplanners is unlikely to keep up leading to pricing pressure. Longer term, the increased respect and recognition that paraplanning is getting – and fully deserves – should in turn lead to more highly skilled new entrants seeking a rewarding career as a paraplanner. The salaries that firms are now having to offer to attract the high calibre candidates they seek are already increasing. This reflects the fact that paraplanners are often qualified not just to level 4, but to level 6 and beyond.

Although there is currently no requirement to do so, many Paraplanners, albeit still the minority, are registered individuals with the FCA and regulated as such. Whether regulated or not, and who knows what the future may hold by way of changes in regulation, paraplanners take their professionalism extremely seriously.

Ongoing CPD is positively welcomed and seen as an essential part of their development.

We shouldn’t forget the part being played by the many excellent outsourced paraplanning firms out there, offering a high quality, flexible service to firms which for whatever reason have decided not to bring the paraplanning function in-house. Getting access to such valuable expertise which is kept up to date (the firm doesn’t have to think about building or maintaining their paraplanner’s technical knowledge or competence), available as required means more and more advisers and planners can get the support they need – as and when they need it – to run the business effectively. Whether they decide to employ paraplanners directly in house or not – or even combine the two – is their choice.

Having made the decision, it will allow the financial planners to refine and develop their client service; to spend more time with clients, building deeper relationships based on trust that will stand the test of time and will be more likely to result in them having the clients for life that they aim for.

So, if we dig out our crystal ball and could look ahead into the future, perhaps to 2025 or 2030, what might the financial planning profession look like by then? We can all hope that greater consumer recognition of the value of the financial planning process which puts clients’ needs first will finally have won out.

That consumers will see financial planning as a necessary and important part of their lives, not just something that’s aspirational, nice to have, or only for those with lots of money to invest. Perhaps I’m getting carried away here, but with paraplanners providing the impetus, more and more advisers and planners can deliver the kind of service for consumers that will change not just hearts and minds but lives too. So many great financial planning firms and professionals are already well aware of how rewarding this can be. I for one am looking forward to that day!

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