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The rise of paraplanning: Better the planner you know

  • Understand how the role of a paraplanner is changing
  • Learn about the differences between in-house and outsourcing
  • Gain an understanding of the relationship between paraplanners and advisers
CPD
Approx.30min
The rise of paraplanning: Better the planner you know

Paraplanners are often the unsung heroes of advice practices, working diligently behind the scenes to provide technical and administrative support for advisers in an increasingly stringent regulatory environment. But lately the profession has started to edge out from the shadows, with the scope of the role expanding far beyond the back-office tasks of yesteryear.

Much in the same way that a nurse does much more than simply helping a doctor, paraplanners, despite still conducting some menial tasks, now form an integral part of the advice process from start to finish. 

“Gone are the days where a paraplanner was seen as a title for an administrator who also did some report writing,” says Linda Payne, head of client delivery at Tilney.

“Today, it is a respected career in its own right. We are seeing more true career paraplanners – who help our financial planners prepare advice and provide valued technical support, research and analysis – and many often have direct client contact.”

Some say the increased status of the role has not yet been accompanied by a rise in the number capable of meeting its requirements. Advisers need good quality research and analytical support more than ever, but with the job requiring an ever-expanding skillset, top paraplanners may not be easy to find.

“I’d love to have five or six paraplanners on the team, but it’s just finding the right people,” says Nathan Fryer, director of outsourcing firm PlanWorks, who currently has just one other employee.

Extra pair of eyes

The skills demanded of the role have advanced rapidly. Sound technical knowledge is at the forefront of putting together solid financial recommendations. In the past, many advisers would communicate their advice to a paraplanner and ask them to produce a suitability report accordingly. This is no longer the case. 

“My paraplanners challenge the advisers and say ‘why have we done this?’” explains Dhawal Chandan, director and financial planner at Glasgow-based firm Just Financial Group. This, he suggests, is a very important aspect for two reasons. 

“One, it betters the paraplanner’s understanding and, secondly, it ensures that the advisers are doing the right thing for the client. It’s an extra pair of eyes and an additional layer of protection.”

This cultural shift is similarly evident among outsourcing firms, who will also speak up when the advice looks questionable. Mr Fryer explains: “If there’s something I’m being told to recommend and I don’t agree with it, then I would tactfully ask them if they’ve considered an alternative.” 

Mr Fryer adds that he would withdraw his services in any situation where the advice is not in the client’s best interests. 

“If I experience an adviser doing something that I don’t consider to be ethical then we just stop working with them – it’s as simple as that.”

In-house or outsource?

As the existence of Mr Fryer’s firm implies, the growth and evolution of paraplanning has meant they are not exclusively found in-house. Independent firms are readily available for those who are looking to outsource some or all of their administrative duties.

CPD
Approx.30min

Please answer the six multiple choice questions below in order to bank your CPD. Multiple attempts are available until all questions are correctly answered.

  1. According to Mr Fryer, what action will he take if he feels the advice is not in the client's best interest?

  2. What has been the reason that Mr Chandan has outsourced in the past?

  3. What are Mr Chandan's thoughts on whether paraplanners should be regulated under CF30?

  4. What does Ms Bell describe as "another set of skills" for paraplanners?

  5. According to Ms Payne, paraplanning is most effective in which scenario?

  6. According to Mr Fryer, any firms that have a paraplanner should do what?

Nearly There…

You have successfully answered all the questions correctly, well done!

You should now know…

  • Understand how the role of a paraplanner is changing
  • Learn about the differences between in-house and outsourcing
  • Gain an understanding of the relationship between paraplanners and advisers

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