He suggested that one of the key developments would be a rise in the use of paraplanners within advice and planning firms and also that recognition of the value of their service would grow strongly.
Those were wise words.
Since then, the RDR changes have meant that not only do advisers and planners need more advanced qualifications, but they have had to take a long, hard look at the nature of what services they provide and how they do it. They have needed to demonstrate upfront that they can deliver services that add real value for clients. They have also needed to be confident that they have an appropriate team in place to support them and using paraplanners has become an important part of this process. As if proof were needed, when surveyed in 2013, a massive 81 per cent of IFP members said paraplanning was important to their business.
So we have seen a big focus on making sure advisers and planners have the right credentials to fulfil their roles effectively. But what about paraplanners? What support is in place for them to develop their knowledge and skills? Do we really ensure that their specific needs are catered for?
Qualifications
Maintaining sound, up-to-date technical knowledge is one area where paraplanners are generally well catered for. It is down to the individuals and firms they work for as to how they maintain technical competence. Qualifications are a key part of this and we are seeing lots of paraplanners gaining level 4 qualifications, some preferring those specifically aimed at paraplanners, such as the Certificate in Paraplanning from FPSB UK. It is encouraging to see more paraplanners also gaining advanced level 6 qualifications, such as certified financial planner certification.
However, in the important area of skills and best practice, advisers and planners have found throughout the years that it is not just about qualifications. One of the most effective ways of improving what they do is sharing ideas and networking with each other. Financial planners have built a really solid professional community where members see each other as friends as well as sounding boards for business ideas. We are now seeing such a community emerging in paraplanner circles, but there is further to go. The professional bodies can help, providing opportunities for paraplanners to meet their peers in more formal settings.
CPD
Unlike registered investment advisers, many paraplanners are not authorised by the FCA to give advice and therefore do not naturally fall within CPD requirements. That does not mean to say that CPD is any less important. Having a well-thought-out training and competence plan for paraplanners, as well as advisers and planners, is a great place to start. It means identifying those areas where paraplanners need to maintain their existing competences, as well as where they need to build new competences in different areas. Once this is done, it is easier to decide what means the individual is going to use to achieve this.
Those firms using outsourced paraplanners may have an advantage in that these individuals have the responsibility to ensure that they keep their knowledge and skills up to date. Such training is therefore undertaken outside of their contracted times. Again, unlike authorised advisers who need an accredited body to provide their SPS, membership of professional bodies is optional for paraplanners. However, if they are to fully exploit the considerable advantages of being part of a growing professional community, it is an option that is likely to become more important for paraplanners too.
Sue Whitbread is communications director of the Institute of Financial Planning
