The FCA suggested that this was down to advisers re-entering the market after the RDR changes took effect at the end of 2012. Entering the market and becoming authorised is one thing, but if they are to have a successful career ahead of them, how will these advisers be changing their service proposition? Will they have the right business models that will allow them to deliver the services that clients want, expect and are prepared to pay for?
Despite being eight months in to the RDR, this is still a critical element for many firms and one that we at the Institute of Financial Planning remain concerned about. It reminds me of the wise words of former IFP president, the late David Norton CFPCM, who I recalled saying: “A poor financial planner is a poor financial planner.” On one level this is interesting, but it goes much further than that. To help clients develop their financial plans properly, advisers and planners need to stick around, and for that they need to make sure the services they provide are profitable. They need to be there year in year out to help clients review their changing circumstances and goals, and make sure clients remain on track to achieve what they want out of life. For that, they need to earn a realistic income, otherwise they will simply leave the profession and seek an alternative career.
So, moving on from remuneration, what else makes a good financial planner? How can they structure things to ensure they have a clear value-added service that clients will pay for on an ongoing basis? It is having the right skill set of course, but it also involves creating the correct business structure to allow them to focus on the elements of the service where they are most effective.
A key success factor reported by leading financial planning firms is the use of a team approach to business and integrating the use of paraplanners, whether in house or outsourced. In the recent member survey conducted by the IFP during the summer, it seems that one of the more notable changes between 2012 and 2013 has been in attitudes towards paraplanning. We were quite surprised to discover a 26 per cent increase in IFP members who view paraplanners as an important part of their business.
But how can paraplanners convince advisers and planners that they really can improve the overall efficiency and profitability of the service the firm provides? One hurdle is clearly that we still see a wide range of individuals describing themselves as paraplanners. Despite the work of IFP to define the job role in some detail, arriving at a consensus around the definition is going to be a slow burn. So when it comes to demonstrating their credentials, it is more important than ever that paraplanners map out a career path for themselves. Unless a paraplanner is authorised by the FCA, as many are, they may not formally record CPD. This needs to change.
During the summer, as well as setting up a new paraplanner zone on our website dedicated to providing resources for paraplanners, IFP also took over the running of the Paraplanner of the Year Award, which had previously been organised by TheParaplanner.com. We were amazed to note the quantity and quality of the entries that came flooding in. The judges have had an incredibly difficult task to identify an overall winner from so many high-calibre entries. From this, although we needed no reminder, it is clear the technical knowledge and creative skills of paraplanners are very impressive. The winner will be announced at the IFP conference in October. One thing is for sure, whoever picks up the award will have established themselves among the paraplanning elite and can look forward to a successful career ahead.
Sue Whitbread is communications director of the Institute of Financial Planning
