The Changing Face of the Modern Paraplanner

Written by Rebecca Lucas, Chartered Financial Planner
Director, Lime Outsourced Paraplanning Ltd

Rebecca Lucas Lime Outsourced Paraplanning Ltd

13 years ago when I started in Financial Services, the paraplanner was a little known job role.  Fast forward 13 years and the role of the paraplanner has evolved significantly, with most companies using the services of a paraplanner to some degree.  Paraplanners now have their own exams and conferences and are a mainstay of the financial services world.  This is fantastic to see, however the unusual thing about the modern paraplanner is how widely the job role varies.

The Paraplanner’s Role Varies

Paraplanners range from someone who is an administrator who helps to fill in the blanks on template reports; to some of the most qualified and experienced people in the industry who can construct bespoke advice for the adviser.  Within this great variance, paraplanners can also be outsourced or in-house.  Also it is increasingly common for in-house paraplanners to become FSA authorised, seeing clients and managing the client relationship –  blurring the lines between adviser and paraplanner.

It is great to have so many different types of paraplanner available to our financial advisers and planners.  This means that a firm can pick a paraplanner to suit their needs.

Don’t Judge All Paraplanners as the Same

An unfortunate consequence of having such great variance is the judgement and criticism directed at paraplanners from the small minority who say they are “nothing more than typists”.  There are of course those paraplanners who do fulfil more of an admin role for advisers, and there is nothing wrong with that.  People should not however forget those paraplanners who are extremely well qualified and love nothing more than getting embroiled in pension input periods.  Both types of paraplanner, to differing degrees, allow the adviser to spend more time seeing clients.   To clear up confusion it may be good to have different job titles for different types of paraplanner; but that, dear reader, is something for another day!!  Please don’t judge all paraplanners as the same.

Advantages of a Highly Skilled Paraplanner

So if we take the highly skilled technical paraplanner.   What advantages do they bring to an IFA practice?

• A second pair of eyes and a sounding board for advice
• Writing high level bespoke reports or financial plans; freeing up the adviser’s time to see more clients and concentrate on business planning
• Someone with time to keep abreast of industry developments and technical knowledge and then pass the useful bits on to the adviser
• Answering technical queries the adviser may have
• Someone to add additional ideas to the adviser’s core advice (eg make a pension contribution for the client to pay less tax on their bond surrender).

A Skilled Paraplanner Can Be Hard to Find

A highly skilled and experienced paraplanner can be hard to find and is often dependent on where you live.  I have heard many firms say they have struggled to recruit the right person who has enough experienced and technical expertise to meet their needs.  There is also the issue of the fixed cost of a highly skilled paraplanner’s salary once you have found them.  You need to pay this fixed cost even if business slows down.  This may not be viable for all firms.  I also come across firms who have a great in-house paraplanner but find they get snowed under when work suddenly spikes.  The perfect solution to all of these issues is an outsourced paraplanner.  They can provide a high quality paraplanning service, without the fixed cost of a paraplanner’s salary and associated sick pay, NI, exam costs, pensions etc.  Also a huge advantage of using an outsourced paraplanner is the lack of geographical constraint –  wherever you are based, you can gain access to the best paraplanner for your firm.

So the last decade has been an interesting and fast paced one for the role of the paraplanner. I wonder what the next 10 years will hold in store?  I, for one, am very excited to see how things progress.