Paraplanners – Adding Value To Your Business

Much has been written about the role of the Paraplanner in recent weeks. Most has been positive but some not so complimentary. Why do some Financial Advisers see a Paraplanner as a value added service and others see them as an expensive commodity? Let’s consider the following points:


What exactly does a Paraplanner do?
We are all familiar with the fact that a Paraplanner undertakes research and writes Suitability Reports, but is the time it takes to undertake these functions really appreciated? After all, once you have written one style of report, you’ve got a template for the next one – right? Wrong! Report writing is not about templates and filling in a few blank spaces with a bit of personalisation. It is about knowing the client, understanding their needs and the Financial Adviser’s recommendation to produce a fully bespoke compliant report in a style in keeping with the Financial Adviser’s business. It should flow. Importantly, it should be written in a concise enough manner that the client will actually read it and understand it. Yes, clients really do read these reports!


Financial Advisers can write Suitability Reports.
Yes, they can and many do, BUT is this what a Financial Adviser wants to be spending their time doing? Surely attending to the needs of their clients is the most important function for a Financial Adviser.  The skill set of a Financial Adviser differs to that of a Paraplanner. Both are technically competent individuals, but the Financial Adviser has the relationship with the client; your clients respect your knowledge and trust in you to guide them through the maze of financial products. This is a huge position of trust which has to be nurtured over time. The Paraplanner is there to complement this relationship. The Paraplanner is also a sounding board for the Financial Adviser – a second opinion and a non-biased view. Most Financial Advisers would agree, in this complex and ever changing industry, two heads are better than one. In a world where the FSA tell you that the difference between restricted and independent advice is about ‘interpretation’ (thanks for that, FSA), it can only become more important to employ a specialist.


My Administrator can write reports for me.
There will always be a crossover of skill sets between a good, knowledgeable Administrator and a Paraplanner; after all, your Administrator is likely to be the backbone of your business and your clients’ first point of contact. However, care should be taken not to assume that report writing is a standardised function. Technical competence is required to ensure that the Suitability Report meets all the compliance criteria and care should be taken to ensure that the right person is doing the job. After all, correcting the Suitability Report in line with the requirements of your Compliance team will take additional time and therefore cost more money in the long run.


I can’t afford a Paraplanner.
You may decide that you do not need a Paraplanner and that your business runs perfectly well without one. However, if you are struggling to keep up with all the necessary paperwork to produce a compliant client file, let alone the writing of the Suitability Report, maybe it is time to consider a bit of extra help. The beauty of outsourcing your Paraplanning is that you can decide how much help you need and when you need it. You do not have to recruit a new member of your team and deal with all the additional expense. There are high quality outsourced Paraplanning companies out there waiting to help you, with highly qualified and experienced staff. The only way to gauge whether a Paraplanner would enhance your business is to try out the service – you may wonder how you functioned without them!

– Cheryl Wade, Nov ’12

Posted in Paraplanning