Given the increasing importance of integrating a paraplanning function into the financial planning business, a working group entirely comprised of practising paraplanners was established in 2012.
The group met recently and had lots to say on the direction of learning and qualifications for paraplanners. About 10 per cent of the IFP’s membership are paraplanners. When it comes to professional qualifications many are very well qualified as CFP professionals or chartered financial planners, others as accredited paraplanners while some do not hold any professional qualifications at all.
In terms of technical knowledge the group feels that what is required for paraplanners in this key area is very similar to the knowledge that financial advisers and financial planners need. The real difference in training needs comes in the area of how we do our job. The softer skills needed by paraplanners and financial planners are quite different. The group was able to give many examples of training it had undertaken which had added value and, on the other hand, some which had been less worthwhile. For many reasons paraplanners may find it more difficult to commit to taking time out of the office to attend conferences and events so it is even more important for them as a group that any time spent out is not wasted. Added to that, it can sometimes be difficult to find relevant training on areas such as report writing, the use of financial planning assumptions and cash-flow forecasting which are instrumental to the paraplanning function.
Within paraplanning it is still clear that the title and job role of paraplanner and what that constitutes in practice can vary dramatically from firm to firm and from individual to individual. The Financial and Legal Skills Partnership has recently reviewed and revised the national occupational standards for paraplanning. These are an invaluable resource for both firms and individuals. The national occupational standards are broken down into units and they look at the different parts of a paraplanner’s job role – they describe the skills, behaviours and knowledge that a paraplanner needs in order to perform effectively in their role. The national occupational standards are freely available to firms and can be used when recruiting, training or developing individuals as paraplanners. They do not prescribe what the job role should be but they do give a useful benchmark. These are particularly helpful for small firms or paraplanners working within small firms as they provide a useful template to consider the role and its development. There is a lot written about the role of an adviser or planner and lots of help and guidance on how that role can be carried out more effectively. However there is much less around for the role of a paraplanner, which is a shame as it is a rapidly growing area of the profession, whether for individuals who see it as a route to ultimately becoming a financial planner or for those for whom paraplanning is their career of choice.
When the certificate in paraplanning was developed a few years ago, the national occupational standards were valuable in deciding what to test and at what level.
National occupational standards can also be used as the basis for apprenticeships. It is true that while some paraplanners are looking to progress their careers to become financial planners, similar numbers are keen to improve their skills and develop their current role, whether in a firm or as an outsourced paraplanner. Learning has to be relevant to the paraplanner’s role, whether that is the current role or the role he is aspiring to reach. More recognition of the skills needed and the development of these skills can only be good for the financial planning profession and for the clients that are ultimately served by these firms.
Sue Whitbread is communications director of the Institute of Financial Planning
