In the span of a decade, the role of the paraplanner has transformed from being relatively unknown in the financial planning industry to a profession that is in high demand.
Even six years ago, when Money Management first covered the emergence of paraplanners and the brace of firms that offered their specialist services on an outsourced basis at that time, the market was patchy.
Back then, it was a relatively new discipline that sat somewhere between administrator and financial planner. No qualifications existed for those who embarked on a career in this role, nor was there a universal job description. For the most part, paraplanners were seen as support staff that did the technical grunt work in the background while the financial planner brought in new business, met with clients and handled the client-facing side of the advice process.
Much has changed since then. Greater demands – both regulatory and financial – being placed on financial planners means they have less time to devote to report writing, suitability letters and the research required to make sure clients are always receiving the best possible advice. Furthermore, the greater degree of sophistication offered by today’s financial planners means the need for more detail in their work; having a paraplanner who can pick up on the technical side of things while the adviser meets with more clients means more hours in the day and more revenue coming through the door.
Perhaps the event that provided the biggest boost to the paraplanning profession, and therefore gave it the legitimacy it deserved, was the creation of the first qualification designed to meet its specific requirements. In 2010, the Institute of Financial Planning (IFP) launched the Certificate in Paraplanning, a QCF Level 4 qualification; the Chartered Insurance Institute (CII) followed suit a year later. Those who achieve the IFP’s qualification can then call themselves Accredited Paraplanners and use the organisation’s logos to prove their credentials.
Today, paraplanners are seen as essential members of a financial planning firm’s team. But the exact form of paraplanner will depend on each adviser’s qualifications. For small firms, an outsourced solution might be the right choice, while large firms might hire an entire team of in-house paraplanners.
Times are a-changing
The role of the paraplanner, as described in Box 1, has advanced hugely and the role has garnered more respect. Ian Porter, head of wealth management at Sanlam Private Investments, says, “When I came back to the IFA world in 2007, I worked for a company that didn’t see the power of paraplanners because the belief was they didn’t generate revenue.”
