Are you making full use of your paraplanner?

I really enjoyed sitting down with my family over Christmas to watch one of our favourite films, Monty Python’s Life of Brian. There’s a classic scene in this film which always makes me think about paraplanning. My tenuous link between Britain’s finest comedy troupe and paraplanning will become clear later.

As it becomes the norm for any forward-thinking firm to work with a paraplanner, advisers are increasingly considering what more they can ‘hand over’ so they can focus on the client relationships.

There are so many things a paraplanner can do for your business, it’s difficult to know where to start. Whether in-house or outsourced, when you’re choosing your paraplanner, consider what you’re going to need from them, both now and planning ahead. Their main responsibility in many firms will be writing suitability reports. Yes, we do this, but it’s so much more involved than filling in blanks on a template.

Your paraplanner will have helped shape the advice, asking questions and giving their insight, helping to meet the client’s needs in the most suitable way. By the time they write the report, they have in-depth understanding of what’s important to the client, writing an engaging narrative and making sure the client is in a fully informed position.

Alongside the suitability report, we increasingly use cashflow modelling to show the client how the recommendations meet their goals, identify shortfalls and demonstrate the impact of ‘what if’ scenarios.

You might want your paraplanner to present the cashflow forecast to the client and to be on hand to answer technical questions. This is easy if your paraplanner works in the office. But if they work from home or you use an outsourced service, it can be done remotely, with the paraplanner attending on screen.

As part of the planning process, your paraplanner can carry out any calculations that might be needed, such as carry forward, lifetime allowance, defined benefit accrual, CGT, IHT and more.

Valuable sounding board

This often leads into conversations about the pros and cons of planning points. Your paraplanner is the perfect sounding board for topics such as ‘Is the lifetime allowance tax charge necessarily something to avoid at all cost?’ And ‘is it worth switching funds in a GIA even if there would be CGT to pay?’ The answer isn’t necessarily the same from one client to the next.

We work in a complex industry, with a constant stream of changes to the rules that shape what we do. Your paraplanner can help by digging into the detail of, for example, the rather messy introduction of changes to the normal minimum pension age. They can then distil this down for you and your team. You and your paraplanner can challenge each other’s understanding not just of the rules, but of their impact in different scenarios.

Your paraplanner will research products, including new ones released onto the market. They can look at funds, ESG criteria, and consider the impact of platforms who have switched their underlying tech.

They’re also likely to have the sort of mindset that enjoys process improvement, presenting you with ways to save time, money, make things quicker, work smarter and achieve more by doing less.

And of course, all this means that you’ve got time to go and see more clients. It’s no wonder good paraplanners are becoming increasingly hard to find.

To mis-quote from Life of Brian:

– Apart from the suitability reports, cashflow models, technical calculations, putting the advice together, spotting mistakes, research, due diligence, process improvement and freeing up our time so we can go and see clients, what have paraplanners ever done for us?

– Made the tea?

This article was first published on Nucleus Financial Illuminate, January 2022