This may require the paraplanner to attend client meetings and undertake various activities, including obtaining the information necessary to compile financial cash flow forecast and draw up a draft net worth statement.
Step two is the preparation of the recommendations, involving undertaking research both independently and with the financial planner to identify solutions to meet the client’s needs. Draft recommendation reports would be discussed and/or signed off by the planner.
The next part is the implementation of these recommendations, and finally a review of the suggestions – which may require a paraplanner to establish a strong relationship with the client, with whom he can organise future planning meetings.
For some paraplanners, their role is a stepping stone to becoming a bona fide financial planner, while for others it is a career in its own right.
Authorised paraplanners still only account for 25 per cent of UK professionals in the role, according to Kim Bendall, director at The Paraplanners, based in Abingdon, Oxfordshire.
It is easy to see why there is a blurred line between ‘career’ paraplanners and advisers, she added.
A large and growing number of paraplanners are at least chartered or certified financial planners, and many have themselves previously worked as IFAs.
“Paraplanners and advisers largely now ‘job share’ the role. Both parties are normally experienced and well-qualified financial planners; it’s just the emphasis of who does what parts of the job that differ,” Ms Bendall said.
“Paraplanners do more of the ‘back office’ work – the research, report writing, number-crunching, analysis and organisation. Advisers manage the client relationship, specifically give the advice, and take responsibility for the client and the overall service and advice delivered to them.”
She continued: “It’s as much about your personality, your ability to cope under pressure, excellent all-round communication skills, numeracy, literacy and a healthy dose of common sense that will make you a successful paraplanner.”
Facing the future
In the years ahead paraplanners face a difficult task in juggling the needs of the adviser, the client, the FCA, the administration team and the compliance consultant, Ms Bendall said.
The implementation of RDR has introduced a wealth of new guidelines and regulatory changes which will undoubtedly result in the need for more paperwork and further scrutiny of client reports.
RDR has created a surge in demand for paraplanners, according to Petra Griffiths, director of East Sussex-based PSG Financial Solutions, who is currently in the process of hiring an in-house paraplanner.
“With more regulations being put in place, particularly post-RDR, and with a growing demand for IFAs, paraplanners have become increasing necessary to IFA firms. Advisers just cannot do all the work required by themselves.