What price to hire or keep your paraplanner?
As the economics of demand and supply continue to drive up the salaries of paraplanners, companies are having to find new ways to attract and keep their paraplanners? Rob Kingsbury talks to Jess Wood, MD at recruitment consultant Sandringham Wood
Greater recognition and respect for what paraplanners do and a limited supply of qualified, experienced and available paraplanners has driven up the salaries of paraplanners in recent years. That is causing problems for the market as smaller companies in particular find that they are unable to meet the cost of employing a well-qualified and experienced paraplanner, says Jess Wood, managing director at Sandringham Wood.
Wood says the economics of demand and supply have been working to drive up salaries significantly over the past couple of years. Currently, financial advice companies in cities like Bristol are posting salaries in a range of £25k to £40k and London roles are advertised from £45k to £55k, Wood says, with paraplanners who are at the top of the profession able to earn salaries on a par with some financial planners.
Paraplanning used to be a stepping-stone to becoming a financial planner. Ten years ago the only real option for a paraplanner to increase their salary by any decent amount was to jump ship or to look to become a financial planner.
That has changed as nowadays paraplanning is seen as a career in its own right, with many paraplanners achieving the highest qualifications in the industry and taking greater responsibility within their firms.
“Paraplanning is now seen as a career and paraplanners are treated with much more respect than a few years ago,” says Wood. Just how much a paraplanner will be paid will depend on the type and level of work they undertake, as well as their level of qualification and their experience, she says. “The term paraplanner is used to cover a range of roles but if individuals provide value to the business, that is they are well qualified, provide full-time support to the financial planner, attend and contribute to client meetings and bring added value over and above writing reports, more often they can attract higher salaries than before.”
Not all about the money
Does this mean that firms looking to hire, as well as firms looking to ensure their staff are not poached to work elsewhere, will continue to have to pay more?
Not necessarily, says Wood. One way to attract and retain staff, she suggests, is for firms to introduce smart, performance-based financial reward. She says: “Firms that I have seen use this successfully offer a decent basic salary and then add the incentive of regular bonuses. Often the payments are little but often, based on individual performance and/or company performance. This way paraplanners feel their work is being properly recognised and appreciated, and the firm pays out smaller amounts depending on the value the paraplanner is bringing to the business alongside how well the firm has done overall in a set time period.”
It is also important that firms recognise that financial reward is not the be-all and end-all of why paraplanners come to work, Wood says. The culture of the firm can have a massive influence on retaining staff, including how much responsibility they are given in respect of their day-to-day role and within the company. She adds: “Many paraplanners that I talk to as part of the recruitment process say that they like the company they work for, they have brilliant colleagues and really enjoy working with a particular financial adviser and a particular client bank – it is only because that set up has changed in some way that they have started to look around. It is soft influences like this that will keep someone in a job. It can even apply when people don’t particularly like the company they are working for,” she adds.
Paraplanners should be rewarded for the professionalism, qualifications, knowledge and experience that they bring to the role and to the company. How much that is worth to the business is going to differ from firm to firm. At the same time there are plenty of other hard and soft incentives that will keep people with the firms they know. Few people stay in a job or leave it purely for financial gain, Wood points out.
Nevertheless, the rules of the game have changed. The more experienced and qualified paraplanners become, the more they can add value to an adviser business, both in attracting and retaining clients, and the more they are going to be able to command in personal remuneration.
In the current competitive market, adviser firms looking to recruit need to set realistic expectations around what they want from their paraplanners, they should consider options such as training up to the level of paraplanner that they want and also to look at what their firm can offer paraplanners over and above pure financial reward, Wood adds.
Rob is editor of Adviser Business Review and Professional Paraplanner magazines
Watch video interviews with Jess Wood:
Visit the Sandringham Wood website
More Articles Like This
Paraplanner and compliance training courses opened by Art of Finance for northern cohorts
New compliance service from Para-Sols founder Cathi Harrison
Para-Sols grows business and launches paraplanner Grad Scheme
FCA’s Percival warns against a ‘tick-box’ suitability mindset
New outsourced paraplanning firm offers range of options