Your IndustryOct 13 2015

Apprentice scheme will plug serious paraplanner shortage

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Apprentice scheme will plug serious paraplanner shortage

There is a “serious shortage” of paraplanners to service the UK’s 20,000 financial advisers, with demand only increasing since the pension freedoms, according to one of the people behind the government’s new apprenticeship scheme.

Earlier this year the government launched the apprenticeship scheme, with ParaHub director Sara Arthur being appointed to the steering group employer board trying to promote paraplanning as an alternative to university.

The programme aims to encourage employers to take part, with a grant of £6,000 per apprentice taken on board, backed by £1.5bn of state funding.

Successful apprentices will be recognised by either the Chartered Insurance Institute or the Institute of Financial Planning as having achieved the certificate in paraplanning.

Last month, the new standard developed to support the apprenticeship received official approval from the government, with Lighthouse, SimplyBiz, Openwork, Sense, Sesame Bankhall Group and Succession all among those signed up.

Speaking to FTAdviser, Ms Arthur said the industry has been “crying out” for a way to introduce more people into financial services, as post Retail Distribution Review there has been a decline in new entrants.

She said: “It is certainly going to be a solution to the lack of paraplanners in the industry and gives a credible alternative to university and promotes inclusive education.

“However, we need to recognise that paraplanners and financial advisers have a very different skillset and mindset; what makes a fantastic paraplanner may not transcend to creating the foundations for a successful adviser.”

Ms Arthur explained that the apprentice scheme was the most logical step forward to highlight the lack of individuals choosing to become paraplanners.

“As paraplanners are unregulated and do not have a minimum criteria for the position, the apprenticeship will ensure that all new paraplanners coming through following this route will gain a professional qualification which will standardise the quality available.”

However, she noted that there is not necessarily any call for paraplanners to aim for professionalisation akin to advisers. “The role allows a paraplanner to act as a ‘critical friend’ to the adviser, but the role of a paraplanner and financial adviser are not interchangeable.”

She believes the financial services industry is now recognising that paraplanning is a profession in its own right, citing Personal Finance Society estimates that 3,000 of its 36,000 members are paraplanners.

“The key is engaging paraplanners and financial advisers to work together, not disengage in separate movements,” commented Ms Arthur.

“Ultimately, if paraplanners wish to develop through to a financial advisory role, then the support is there. What we do not want to do is for this to be seen as a ‘progression’, as they are both career paths in their own right.”

peter.walker@ft.com