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Does your business need a paraplanner?

Every one of the IFP’s Accredited Firms uses paraplanners to deliver their financial planning service. That speaks volumes, says Sue Whitbread, communications director, 
Institute of Financial Planning

As we return from annual holidays, refreshed and ready to tackle the months ahead with renewed vigour, now is a great time to review what makes our businesses tick and how we can make them even better. It is clear from the IFP’s Paraplanner and Accredited Firms surveys that a key characteristic of a successful financial panning firm is having an effective team in place, which includes the use of paraplanners.

Most firms recognise that to deliver an effective integrated financial planning service means having a great team that has a complementary skill set and works well together. When the IFP conducted a survey of Accredited Financial Planning firms earlier this year, 75% of the firms reported having two or more support staff per planner/adviser. This is very different from the old commission-based sales model, where often, just one or two support staff backed up numerous advisers – if indeed they had any such support at all!  Every one of our Accredited Firms uses paraplanners to deliver their financial planning service.  Embracing the paraplanner role has a positive impact on a firm’s ability to innovate, on reducing its overall business risk and on enhancing clients’ experience too.

Heavily involved

In May, the IFP conducted its annual Paraplanner survey. We were not surprised to find evidence that paraplanners are very much involved in the delivery of the financial planning service.  Cashflow modelling is a core skill, with 79% working in firms that provide this for clients and 64% personally involved in delivering it. Paraplanners are also actively involved in firms’ due diligence/research processes with 83 % involved either exclusively (33%) or along with the Financial Planners (49%).

Perhaps not so obvious are the benefits paraplanners provide as a valuable sounding board for advisers and planners. They can challenge proposals, clarify technical issues and discuss alternative planning solutions, all of which really help to improve the quality of service and advice that the client receives. Creating financial plans and client reports, conductingresearch, analysis and due diligence are time consuming tasks that require a specific skill set.  Knowing that they are being handled efficiently and effectively by a team member who has that skill set can help to reduce business risk and is great for the planner or adviser too. It means that they can maximise their time in direct client facing work. 56% of paraplanners report that they have an excellent working relationship with their financial planner/s and 83% indicated that that they feel valued as a team member. This is all positive for business profitability too.

Career choice

Paraplanners themselves are building a really dynamic community where they share ideas and best practice in the same way as planners and advisers. No longer is paraplanning seen simply as a route to becoming an adviser, rather it is seen, quite rightly, as a strong career choice in its own right.  65% of respondents say they intend to remain as a paraplanner, with just 23% aspiring to become an adviser or financial planner in future. These are individuals who clearly take their professionalism very seriously.  60% are qualified to QCF Level 4, 30% are graduates and circa 20% have level 6 professional qualifications, such as Certified Financial PlannerCM certification.

Reflecting their increasing importance to the business, paraplanners’ earnings are rising.  51% of respondents reported earnings between £30,000 and £40,000 a year. However with many firms reporting that there simply aren’t enough great paraplanners out there to satisfy increasing demand, it’s reasonable to expect that earnings will continue to rise.

Backing up the survey findings, the overwhelming enthusiasm and passion shown by delegates at the IFP’s paraplanner conference in May clearly shows that this is a dynamic group with great knowledge, great skills and who face a very bright future indeed. Great paraplanners want to work in great firms, however. If your business isn’t in the right shape, you might find that you’re losing out in more ways than one.

For more information on the IFP






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