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Don’t underestimate the value of your admin staff

Outsourced paraplanning firm director Alan Gow says adviser firms can undervalue the importance of good administrative staff to their business

With more advisory firms realising the benefits that paraplanners can bring to their business, paraplanning business is booming. But firms should not be focusing on paraplanners at the possible expense of their administrative staff, according to Alan Gow, director of Argonaut Paraplanning.

“Adviser firms can benefit in many ways from the support of a paraplanning resource, whether in-house or outsourced, with the primary benefit being that it frees up their time to spend seeing clients. As such, advisers can quickly see and appreciate the work of paraplanners. The same is not always true of their administrators,” Gow says.

“We work everyday with administrators and so we have first-hand experience of just how important it is that adviser businesses have good administration in place. It is important that it is done right. Often it is the administrators who have to deal with the pension and investment providers, tracking down the information necessary for the financial plans and suitability reports to be constructed. The consequences of missing something in the data gathering process or even of plan details being input incorrectly onto a firm’s system, can have a big knock-on effect at a later date.

“The value a good administrator brings to a business I think is something that is perhaps undervalued in the industry at the moment.”

Gow believes there will be a growth in the use of administrators in the industry, just as there has been a growth in the use of paraplanners, as smaller companies in particular see a benefit to having or expanding a dedicated resource. “The work triangle of financial adviser, paraplanner and administrator is one that has been proven to work very well in many firms. I think we will see smaller firms start to use administrators rather than for advisers to do the administration themselves, which is an extremely expensive use of an adviser’s time. Also, we’ll see outsourced administration services growing as well as outsourced paraplanning, the advantage for advisers being that they only have to pay for the work they need done.”

Post pension freedoms workloads

The level of paraplanning and administrative work has increased, Gow says, since the implementation of the pension freedoms.

“Our work has always been biased towards pensions but that has definitely increased since April last year. In particular, we’ve seen an increase in drawdown business, part of which has been talking to advisers about the different options for clients looking to draw funds in retirement – where appropriate, accessing investment accounts and ISAs before pensions – as well as the things you can now do in terms of passing funds on and death benefits etc.

“I think the death of annuities has been overstated, they are still the right thing for a number of people but it will be interesting to see how the new market for hybrid products develops,” he adds.

“Pensions have got more complex for consumers but really interesting for advice firms and they provide a good opportunity for advisers to demonstrate the value they can provide to consumers.

“What advisers now need to be doing is freeing themselves up to concentrate on seeing clients by making good use of the paraplanning and administrative resources that are available to them.”

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