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Planning for a bright future: why paraplanners are now invaluable

Over the past decade, administrator and paraplanner roles have evolved to a point where they are now invaluable within adviser firms, as Barry Neilson, business development director at Nucleus explains

The past ten years has witnessed seismic change within the financial services world and, as part of this dramatic shift, the roles of the administrator and the paraplanner within adviser firms have slowly evolved.

The key reason for this evolution has been the new rules and regulations in the financial services industry where the administrator role and, in particular, the paraplanner role have both been redefined.

A decade ago, what a paraplanner actually did within an adviser firm was unclear to those outside the industry. One of the key catalysts for change wasthe Retail Distribution Review (RDR), following which the absolute priority for firms was the need to provide more consistent client outcomes.

Supporting the business

Prior to this, it was normally the adviser who worked with the client at each stage of the advice process, leaning on the administrator for their support when required. These days, more and more firms are harnessing the support skills of a paraplanner, allowing advisers to spend as much time as possible with clients to focus on gaining a deeper understanding of their lifestyle objectives and financial aspirations – as well as maximising profits for the firm over the longer term.

As vital members of staff in the post RDR world, both administrators and paraplanners can now be considered key to building a sustainable and profitable financial planning business.

The widening usage of technology within the advice process has seen a number of new responsibilities fall on the shoulders of planning firms and this has acted as a catalyst to evolve the paraplanning role. Generally speaking, however, the main focus for the modern day paraplanner is to provide research, analysis and report writing support to advisers. Today’s paraplanner is an expert at preparing a range of documents for the adviser, from financial forecasts and projections to review reports.

Technical knowledge

Compared with ten years ago, the paraplanner now enjoys recognition within the industry and is seen as a highly trained, invaluable employee of an adviser firm, their value recognised by an increase in benchmarked salaries and benefit packages.

For example, following Budget announcements, it’s the paraplanner who will be digging at the detail, supplying the adviser with the information he or she needs. While the adviser manages the financial needs and goals of the client, paraplanners look to support the adviser in meeting these client goals, always as agreed with the adviser. Put simply, most paraplanners are now seen as a sounding board within adviser firms. The effective paraplanner is able to answer technical queries the adviser may have and with their technical knowledge, they can carry out some of the more complex tax calculations and support the adviser by supplying up-to-date research in areas such as investment planning, retirement planning, inheritance tax and estate planning.

Flexible and adaptable

In terms of their knowledge and skills, the beauty of the contemporary paraplanner role is that it’s adaptable and adviser firms can pick a paraplanner to suit their specific needs. Paraplanners don’t even need to be based in-house – adviser firms can choose to outsource the role as and when required.

More recently, the role of the paraplanner has become a respected career path for university graduates aspiring to enter the financial planning profession and should act as an important source of new blood and young talent into our profession.

Post RDR, with the focus for adviser firms having shifted towards a client-centric business model, the importance of the administrator and paraplanner roles will continue to be recognised by the industry. What’s clear is that these roles do not replace the job of the financial adviser, rather it’s a solid, professional, working partnership aimed at creating ever better client outcomes.

The future looks bright for financial planning.

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