How Can You Trust An Outsourced Paraplanner?

How Can You Trust An Outsourced Paraplanner?

There comes a time in a growing IFA business where you have a decision to make – do I trust an outsourced paraplanner to help me grow? The choices here are hiring someone or outsourcing. With the advice in books such as The 4 Hour Work Week, outsourcing has become big business. But when we look at financial services, there are some major considerations to take into account. How can you trust an outsourced paraplanner with your client data? Your reputation? Your business? Great questions. Let’s take a look at the issues at stake.


In the day and age of hackers and computer viruses, we are all told to protect our data (and that of our clients) with vigor. Delivering it into the hands of someone we don’t know seems like anathema to this approach. But it doesn’t have to be.

If you carry out your research thoroughly in the first place, then these issues fade into the background. Look for reviews, ask to speak to their existing clients and find a paraplanner that has the same values as you. Every financial adviser will have a slightly different view of what they want from a paraplanner. Guess what? Paraplanners have the same level of scrutiny when looking for an IFA to work with. Speak to 3 companies and interview them like you would any candidate.

Data security is becoming bigger and bigger in the business world as we are what we know as much as what we do. GDPR has made this an even bigger consideration. Make sure you team up with an outsourced paraplanner that is registered with the ICO and understands data protection as well as you do.

We have all heard stories of clients being poached by unscrupulous firms pretending to offer support whilst mining data. Ensure that your Service Level agreements or SLA’s reflect the relationship you want to have with each other. More on SLA’s later in this article.

A Lack Of Experience

When we’re looking for a paraplanner, we don’t always know whether we’re getting someone who is wet behind the ears or someone who has seen it all before. The price that an outsourced paraplanner charges can be a strong indication of their service but doesn’t always tell the whole picture.

Again, speaking to multiple providers and following up their references is the ideal way to find out just what your prospective paraplanner can add to your business. Ask questions such as –

  • What parts of the process do they carry out for you?
  • Would you still hire them if they put up their prices by 50%?
  • How much value do they add to your business?

Look for people to quantify their relationship with their paraplanner to ensure that you are getting someone with the required level of experience for you.

Here at the Paraplanning Hub, we have chartered paraplanners, many that have been IFA’s in a past life. That means you get someone who has the level of experience you need.

Ambiguity In SLA’s

The Service Level Agreement between you and a provider (any provider) is the framework for the kind of service you can expect. And with an outsourced paraplanner, this can be the one thing that ensures you get what you pay for. But if there are ambiguities in that agreement, you don’t know where you stand.

Look to have a watertight SLA, that outlines all your expectations and all those of the paraplanner too. This will stop issues such as poor response times and some work being turned away. And that leads nicely to the next thing…

Lack Of Flexibility

If you have someone working for you, then you can get them to do other things when the paraplanning work isn’t in plentiful supply. It is that level of flexibility that often leads people to choosing an employed paraplanner over outsourcing the work. But that doesn’t necessarily have to be a problem.

If you and your paraplanner know where you stand from the outset, then you know what you are passing on and what you are dealing with in-house. Think outside the box here – paraplanning isn’t the only part of your business you can outsource.

The Fear Of Relying Too Heavily On Someone Who Could Let You Down

Long title – big fear. Outsourcing a large chunk of your business feels good. But finding that your service provider lets you down can have a devastating effect on your business. First things first; advisers have to realise that outsourcing paraplanning is not a solution to any in-house problems. This isn’t a magic bullet. So, you need to still keep your hand on the tiller, rather than abandoning all connection to the work your paraplanner does. After all, the FCA will still look at you for compliance and will still come down on you like a tonne of bricks if there are flaws in your advice.

If you want to discuss the way forward with paraplanning then drop us a line to see what the future of paraplanning can look like to your business.