A couple of the eternal questions when your financial planning business starts to grow – freelance paraplanner or new staff member? There are pros and cons of both, and many people fall on the side of taking on a full-time member of staff as they ‘get’ the culture and can perform other tasks when needed. You can train them in your own image, where their training, development, and supervision are totally under your control.
Having said that, a freelancer doesn’t come with all the baggage of hiring a member of staff. Baggage such as the cost of recruitment, employer’s National Insurance contributions, pension contributions, annual leave, etc, etc.
Many financial advisers want to grow, want to make more money and keep more clients happy but they don’t want to add to the headcount and build up their expenditure, especially when the nature of the business can be cyclical.
The Pros Of Hiring An Employee
Culture eats strategy for breakfast, or so they say. The culture of your business can be disrupted by hiring freelance support, as they don’t go through the same onboarding and don’t have the same connection to your business. Overcome this by building a strong relationship with a quality freelancer.
Immediate supervision of your employees is a major benefit, especially in a regulated environment such as financial services. If you are in charge of the training and development of an employee then you can upskill people, helping with succession planning.
If you treat an employee right, then they will be an advocate for your brand and help build your business. The days of a job for life seem to be over, and people change jobs every few years on average, so this might not quite be the advantage it first appears.
The Pros Of Going with A Freelancer Paraplanner
A freelancer has to earn their keep, or they are out on their ear. Unlike an employee who has certain protections in law regarding their employment, a freelancer can be dropped at short notice if they don’t cut the mustard. As a consequence, you find freelancers give their all to maintain contracts.
National reach is another exciting reason to look at hiring a freelancer over a new member of the team. If the talent doesn’t lie in your local area, then a freelancer that works from anywhere else in the UK could have the talent you need.
The costs associated with a freelance paraplanner are consistently more competitive. Let’s take a look at this in more detail
The Long And The Short Of It
These are the figures involved in a typical practice.
Salary? A typical senior chartered paraplanner would command a £40K salary. Then with a further typical 25% required to cover NI, benefits, office space, training, etc. At 220 days (after hols and training) and a typical 6 hours a day chargeable time this delivers –
- 1320 hours a year
- 110 a month
- at a cost of £38 per hour
A typical IFA needs around 15 hours a month of paraplanning support, but let’s work on 20 to be on the safe side. At £60 per hour including VAT (our fixed rate), this comes to £1,200 a month, say £15,000 a year. So, a firm with 3 advisers or less would clearly be financially much better off using an outsourced, chartered, paraplanner.
But it isn’t just this that we need to take into account. Hiring a new team member takes time and money. Think about advertising costs, shortlisting, interviewing, onboarding, etc and we’re looking at an average tenure of only 2 years before a paraplanner moves on.
The Paraplanning Hub
That’s where we come in to take the strain. Rather than go through the hassle of looking for the perfect support for your business, we have done all of that for you. So, you get quality paraplanning support on tap – just switch on and off whenever required.
We’re looking to work with progressive financial advisers that understand the benefits of quality chartered paraplanning support. Is that you? Then drop us a line.