In Focus: Modern financial planner  

We need to define the role of career paraplanner

Pippa Oldfield

Pippa Oldfield

When I started out as a trainee paraplanner more than a decade ago, paraplanning was still relatively new and completely unheard of outside of the financial services sector.

There was no defined role and paraplanning certainly was not recognised as a standalone profession.

In a career spanning three very different financial planning businesses, I have seen paraplanning evolve significantly, with a noticeable shift in the way paraplanners and advisers work together.

Previously more of a hybrid administrative role, in which the paraplanner worked for the adviser, the relationship has become a much more collaborative process with the paraplanner working alongside the adviser.

To me, that shift was first noticeable in the aftermath of the retail distribution review and the move from transactional, product-based advice to a more planning-focused, fee-based approach, and the need for our profession to demonstrate to clients the value of our advice.

With this, as well as a host of sweeping regulatory changes and the pension freedoms, the complexity of advice and client needs has increased, and along with it a demand for technical skills.

More collaboration and influence

The traditional view of a paraplanner being a ‘back office technician' churning out reports is an outdated one, and with more comprehensive planning, two heads are better than one.

Trained to scrutinise detailed information and deliver personalised recommendations, paraplanners can bring an objective insight and ideas to a case, and are often referred to as the ‘adviser’s critical friend’ or a sounding board for unusual or difficult cases.

Working alongside a paraplanner, the adviser can focus on the client relationship management, business development and getting the advice proposition right.

More advice firms are recognising the potential contribution paraplanners can bring as an intrinsic part of the advice process and client experience, whether they are employed in-house or outsourced.

Two surveys conducted by Research in Finance on the direction of paraplanning over the past five years have shown that not only is paraplanning now a core function within financial planning but paraplanners are becoming more influential within advice firms.

Paraplanners are being given greater responsibility, with increasing numbers taking positions on investment committees or becoming members of the management team.

As paraplanning teams have grown, there have been increasing opportunities for paraplanners to step into the role of team leaders and managers.

So is paraplanning a career of choice or simply a route to advising?

In a survey of 3,000 paraplanners conducted in October 2021 by Idex Consulting, around 50 per cent determined it as their long-term career preference.

This contrasted with less than 20 per cent who said they had ambitions to become advisers. It is also not unusual to see advisers step away from client contact to concentrate on technical aspects of advice.

There is industry recognition too. The professional bodies – the Personal Finance Society and the Chartered Institute for Securities and Investment – have paraplanner panels to help give better representation to paraplanners in our profession, and the Personal Finance Society even has a paraplanner representative on its board.