Life Companies – lock up your sons and daughters!
Paraplanners’ Powwow discussion highlights source for paraplanner recruits, Rob Kingsbury writes
Yesterday I spent 7.5 hours in a field in Northamptonshire, in a teepee, at the national Paraplanner Powwow. For the uninitiated this informal ‘unconference’ is a no suit and tie, no speakers and speeches, and the delegates select the topics for discussion and do the talking. Free and frank exchange of views is encouraged under Chatham House rules and provides an open forum in which paraplanners from around the country can talk about issues in the market, the challenges they are facing and, most importantly, share ideas, thoughts and best practice.
One of the issues that was highlighted and discussed was the current dearth of good quality paraplanners available to fill the growing number of paraplanning roles opening up in financial advisory firms around the country; a situation that wasn’t expected to be resolved any time soon.
Anyone looking to hire a paraplanner for their business will know that the competition among adviser firms for paraplanners with sufficiently high level of qualification and experience is fierce.
With growing numbers of advisory firms realising the business efficiencies and benefits of having a dedicated paraplanner focusing on the research, analytics and report writing, while the financial planner/adviser concentrates on the bigger picture and building the client relationships, the demand for paraplanners has increased exponentially in the past couple of years.
This has seen an explosion in the number of outsourced paraplanning services, yet even these firms are finding it difficult to recruit enough suitable staff. One outsourcing firm estimated they are seeing up to 25 unsuitable candidates in order to recruit one quality paraplanner.
In addition, paraplanners from smaller advisory companies reported that they were being outbid for the external candidates and seeing in-house trained staff cherry-picked by larger firms who were able to offer higher salaries.
In a market being battered by this imbalance of supply and demand, one suggested solution was to poach administrative, technical and compliance staff from life companies. Two attendees were previous life company employees that had made the move into paraplanning and had not looked back after doing so. As one commented: “Life companies have the money and resources to train their staff up to the right level, which generally small to medium adviser firms don’t. So often the staff will have had internal training as well as achieved qualifications. Yet life company employees often are in mundane jobs and feel undervalued, so to have someone come along and say we value you for your skills and knowledge is a real incentive to make the move.”
Any cost differential there may be between what an advisory firm might want to pay and the cost of bringing a trained member of staff on board, must surely be covered in the long run by the increased revenues from freeing up advisers to bring on new clients and for the firm to retain and better serve its existing ones.
Life Companies might need to lock up their sons and daughters.