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Structure of a small business: Informed Choice

Nick Bamford, executive director of Surrey-based Informed Choice, talked to Rob Kingsbury about how the firm is structured and its current need for a paraplanner

For many small businesses growth occurs organically, adding staff as needed. How those staffed are sourced and whether they are positioned effectively within a business have been subjects of several articles on Adviser Business Review. Getting the business structure right is key to running a smooth and efficient business. In a series of articles we’ll be looking at the structures firms have put in place and what works for them.

Informed Choice, based in Cranleigh, Surrey, is currently advertising for a paraplanner to join what will be a nine-strong team. Executive director Nick Bamford explains the need for the paraplanner and where the role fits into the company’s structure and team ethos.

Bamford says: “We’ve had paraplanners for many years as part of the team-based approach we operate, which includes a financial planner team, an administration team and the paraplanner role, which sits brilliantly, in our view, between those other two functions.”

The Informed Choice team includes two full-time financial advisers, including Nick, who are also directors of the firm, two self-employed financial planners, the paraplanner, MD and investment manager Martin Bamford and two administrative staff. The current paraplanner is authorised and regulated as a financial adviser and is moving into a client facing role full time, hence the vacancy.

Within that team approach, Bamford says, the financial planners are responsible for delivery to and engaging with the client, the administration team undertake the data capture and data storage, and the paraplanning role “analyses all that data and works with the admin team and the financial planners to construct the advice we are going to deliver back to the client. What’s important is that the team signs off on the report to ensure it’s the right advice for that client. I think that also helps to de-risk the business.”

Bamford sees the paraplanner role as pivotal within the firm. “It’s about specialism. I’ll do the client-facing role but I’m going to need the administration and technical expertise behind me to be efficient. So, for us, having a paraplanner is critical and we see the value of that role as keeping everything on the straight and narrow, if you like. If the paraplanner has any particular concern or disagreement with the particular direction of travel in respect of the advice, they have a big say in the outcome. It’s a key role in the business.”

Essential to professional advice

Bamford believes also that the role of paraplanner is now an essential for any professional advisory businesses. He admits though, that in his experience not all advisers are of the same opinion. “You do get the impression that a lot of advisers don’t like the thought of a paraplanner stepping on their toes. If you think that as a financial adviser where you deliver value is in the creation of the advice, you can see why you would be reluctant to let someone else do that part of the job.

“But paraplanning is growing into a niche profession of its own and as more and more advisers turn their businesses into a professional practices they will see that this is not about paraplanners competing with financial planners but about complementing each other,” he says.

Planner to paraplanner ratio

Some paraplanners might baulk at the ratio of advisers to the paraplanner and admin roles within Informed Choice, but Bamford says, “We’re a relatively small team of financial advisers and one person can handle the demand currently. Our back-office team are that good that we can have this ratio of financial planners to one paraplanner and two admin staff and have an efficient business model.”

What the firm requires in its paraplanner says Bamford is an aspiration to achieve level six qualification, “demonstrating real progress towards chartered or certified financial planner status”; comprehensive knowledge of pensions legislation and IHT planning; and “a really good understanding of the investment world, in particular things like how a firm’s centralised investment proposition works”; as well as the ability to translate customer questionnaires and discussions about appetite for risk and tolerance for loss into meaningful documents. “And they must have good communication skills and write in plain English.”

Above all, he adds, the paraplanner “has to be advice driven rather than product driven… so not someone looking all the time for a solution that is a product or an opportunity to sell but rather someone looking for a suitable advice solution, which may well be do nothing and keep what the client has or just tweak it slightly.”

Visit Informed Choice website

 

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