Rise in specialist paraplanning services predicted
The ever growing demand for paraplanning is likely to see a rise in specialist outsourced paraplanning as well as pure administration services, says The Paraplanner’s Richard Allum
Launch of outsourced paraplanning services that specialise in certain areas of the market, such as investment, pensions, tax and trusts, would be a natural development in response to the rapidly growing demand for paraplanning services in the advisory market, according to Richard Allum, managing director of outsourced paraplanning firm The Paraplanners.
Allum was speaking at the Outsourced Paraplanning Workshop, an event hosted by Allum and fellow director Kim Bendall, for paraplanners who were already running their own business or were looking to do so. He said the demand for paraplanning services was strong and growing and that not all advisory firms wanted full on paraplanning service. “While many firms purely want to run a client-facing operation and they outsource their entire administration and paraplanning side of the business to us, others come to us just looking for administration services, or for specialist knowledge that we may have. This could be, for example, in DB pension transfers or trusts, areas in which they or their in-house paraplanning team may not have knowledge and experience.
“Likewise, they will give us work that is specialist because it is more complex and they know we have the expertise to deal with it and again, it’s experience that the in-house team may not have.”
Allum suggested that Paraplanners setting up their own firms should look to their competences and if they had particular specialisms this could be an avenue to explore, playing to their strengths.
“I think we will start to see specialists in at retirement, pension and divorce, long term care and so on; I think the market is growing so much we are going to start to see that,” he said
Other specialist areas could include group risk, alternative investments such as enterprise investment schemes and venture capital trusts, as well as research in the mortgage market.
Allum added that he had noted a change in the market in the past few years, with a growing demand for specialist services. “Five years ago adviser firms wanted the full paraplanning service. Now we are seeing more firms that have their own paraplanner and what they need from us is the expertise in particular areas and our ability to deal with the more complicated work. Similarly, for some firms we provide a particular part of their service proposition, because it is a skilled area of work and they do a lot of that kind of business but haven’t got the in-house expertise.”
At the same time, he said, he was seeing a growing number of smaller adviser firms wanting administration including implementation for the client. “They are realising that their skill is in the face-to-face meetings with clients, bringing in the business and the client management, and they want us to take on practically everything else for them.”
“We’ve seen a growth in people needing our administration work for firms and there are now three or four pure administration services in the market. Unlike us, they don’t want to do the paraplanning; they just do the administration, data gathering and implementation.”
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