Well if it works for you – great. I guess it is suited for the larger firms. But I just can’t help believing that it adds cost. I suppose it’s down to the business model. To me it seems that the ‘adviser’ is just a salesman or business getter. Perhaps it is still the case that some firms still need to ‘prospect’. The smooth approach and silver tongue would appear to be the adviser role in this case. What does the adviser advise on if the paraplanner does the real work? “Yes Mr Client you need a pension and my paraplanner will work out the details” But with over 50% not even meeting the client I wonder how they get ‘a feel’ for the person that they are working for?
All in all I really don’t think it is a case of salt & pepper, lock and key. It may work for some and not for others – particularly those who are focused on providing a price competitive service. I guess one could say ‘horses for courses’, but even that is now a questionable exercise!

Harry Katz   18/02/2013   09:45

Maybe I shouldn't actually respond to this article which is probably intended just to bait both Advisers and Paraplanners into responses, but OK, I'll take the bait.

First calling Advisers 'salesmen' is just plain insulting when you stop to consider the sheer amount of work that hundredds of advisers have done in order to become Diploma, Certified and Chartered (sometiemsd all three), how they have overhauled their business models and developed their client propostions over several years.

You should also know that a large number of paraplanners hold Diploma and many are pushing onto Chartered/Certified because they recognise the need to build up professional standards and be able to properly support their advisers.

To allege that advisers would actually say to their clients that the paraplanner will work out the details and therefore they dont actually do any work, but then that the paraplanner doesnt understand the client even though they are allegedly doing all the work, is just such an ignorant statement that, well done Harry, you succeeded in making me quite angry.

Does Harry understand that the paraplanner/adviser relationship works because both of them understand and know the client as well as each other. A Paraplanner does not need to be in the client meeting for this understanding to develop. All that is required is good communication between the adviser and the paraplanner.

Paraplanners do not work best for larger firms. I am currently working in a firm of 8 people, before that it was 11 people, before that 9 people. The contribution that a paraplanner makes to a small team is invaluable and sometimes we are the glue that bonds the team together.

If you dont want to employ a paraplanner because you dont see the need, if you are happy to do all your own work, then fine, that's your choice. But dont rubbish other advisers for using paraplanners, because I think you will find that their businesses are successful, profitable and most importantly their clients are happy.

Christina   18/02/2013   11:49

Dear Christina

Maybe you shouldn’t. I don’t think you have read my post carefully enough - perhaps as a good paraplanner you had a lapse?
I was putting forward questions, not statements.
Please refer to the words ‘perhaps’ and ‘it seems to me’.

I did try to be brief and save my ‘paraplanner’ the effort of typing too much.
Indeed if the paraplanner is the glue – what exactly does the adviser do? It is a given that advisers are qualified now. The question here is why weren’t they qualified ages ago if they have been in the industry any time? But what of the possible situation where the adviser is qualified to (say) CFP or Chartered and the paraplanner is not? I can understand if the paraplanner’s job is to assemble facts and details under instruction from the adviser, but that is rather elevating the title of a PA. (Who are just as invaluable). If a paraplanner is one who puts together a plan, I just don’t see how this can be done without direct client interaction – no matter how well briefed he/she maybe. Unless of course the plan is ‘brushed up’ by the adviser who does have first-hand knowledge. How many times have I heard ‘this is a people business, so how can you divorce the planning from the person?
Yes, I can well understand that a paraplanner will be of inestimable use to a firm of 8 – 11 advisers. Perhaps those only qualified to diploma would welcome the onus being taken off their shoulders. (Or are all these advisers qualified to the higher level?) But I do wonder why they can’t do their own plans. Perhaps the paraplanner simply concentrates on research and the advisers do their own plans. In which case the paraplanner isn’t a planner, but a researcher – and there is nothing wrong in that.
Let me redefine – for micro firms 3 RI’s and less (which according to the statistics were the majority up to December 2012) this seems to add disproportionate costs to an adviser firm who should be able to undercut any opposition from firms of (say) 5 adviser or more. Obviously offering similar quality and expertise.
I guess I’m just a pedant who can’t come to terms with the modern penchant for titles. Years ago the only use for the prefix Para – was for a parachute. Paramedics and paralegals might have existed, but they went under different titles. I have come across Talent Managers or HR Managers (Personnel), 25 year old Vice Presidents of tiny companies. (Trainee), Chief Visionary Office (God knows!) amongst others.
But as I said at the start of my original post I personally have nothing against the concept if it ‘floats your boat’. It’s just from the perspective of a small adviser I just don’t geddit.

Finally I don’t believe you meant to imply that those who don’t employ paraplanners are not successful or profitable and that they have unhappy clients. And I don’t believe looking through my post that I rubbished anyone. If the questions hit a target or if in certain instances the cap fits – well then so be it.

Harry Katz   18/02/2013   18:55

2013 is now a reality and very recent research is showing us that after getting the exams, many advisers may be taking some time to review their business plan, their business goals and the business’s resource requirements.

This is not a process to rush, but it is a pressing one if the year ahead is to be a success.

Many smaller adviser firms may not fully appreciate that paraplanning, a huge time saving opportunity to embrace, is a vital, yet often confusing part of the business to resource – is it better to outsource or is it better to undertake the function in-house?

Given that there can be as many answers to this question as there are businesses we endeavour to provide advisers with some factors to consider, below, for their business needs.

1. Do you currently have an in-house paraplanner?

Is this working as effectively as you would like? If so, are you and your paraplanner on the same page when it comes to matching their aims and aspirations with yours?
Are they a career paraplanner or likely to want to transition to become an Adviser.
What could be improved?
Is your paraplanning process as efficient as you would like? Is the quality up to scratch? Do you have the time and resources to put into developing and training your paraplanner if this is required?
Do you have a solid, quality workflow process?
2. Do you want the additional responsibility of the requirement to manage, train and develop people or is your real passion in networking, business development and managing your ongoing relationship with clients?

3. Is managing your multi skill aspects of the business eating away at your time and energy to do the things you love and want to do?

4. Will freeing up the time you spend doing these tasks enable you to see more clients and generate more income?

5. Is business succession important and do you see the paraplanner being part of that succession plan and if so, does your paraplanner realise this?

6. Are you having trouble hiring a paraplanner? Are you in a remote location? Do you have the cash flow to support the level of expertise that you would like?

7. Would you like to partner with an expert in their field who has additional experience and insights that you may not ordinarily consider?

8. When it comes to the costs and cash flow in running the business is it important to you whether costs are fixed or variable? Would you like costs to fluctuate in line with how the business is going? Or would you like to know exactly what your costs would be regardless of your level of activity? Do you have the capital to support – additional technology requirements, hardware, log-ins for software, office space and recruitment fees?

9. How important is it to you to control the paraplanning function? Do you want to work on the strategy together or do you want to provide the recommendations and get assistance with the technical and compliance requirements in forming a Statement of Advice? Do you wish to have access to a “sounding board” for your strategy and recommendations?

10. How important is it to you that plans are completed within agreed turn-around times? What is your time lag between seeing a client and providing them with a Statement of Advice? Does your outsource provider give a guarantee or are your in-house paraplanners KPI’s aligned to this?

11. Are parts of your advice process heavily segmented with people in your office sure of your expectations of their work and a clear job role? Or is your business more fluid – with people changing from administrator to paraplanner to client services depending on the needs of the business?

12. Do your staff have the expertise and training required for this?

With staffing costs accounting for over 50% of the total costs for boutique financial planning practices getting the correct mix of resources for your business is critical.

The mix of resources is likely to change over time depending on the requirements and nuances of your business. So what is the answer for your business? Pure in-house support? Partnering with an out-source provider? Or a combination of the two?

Smaller adviser firms may wish to start with a discussion with a Paraplanner, to assist in this process we have created a new zone with links to many of the leading outsource firms. Do make contact, via our Paraplanner zone, it may change their lives for the better?

Derek Bradley   19/02/2013   16:55